by Cheryl-Anne Sturken | January 01, 2005

Ernest Guerra Jr.It was quite a challenge, admits Ernest Guerra Jr. (right), director of travel and meeting management for Piscataway, N.J.-based manufacturing giant American Standard Companies. Last year, Guerra spent six months analyzing data, consulting suppliers, holding myriad focus groups with the company’s numerous administrative assistants, and forging alliances with senior management, accounting and corporate communications. It was all in an effort to create an orderly structure to govern meetings at American Standard, which has about 60,000 employees in 28 countries, with 22,000 based in the United States.
    When the dust cleared, Guerra was able to roll out a formal policy that imposes control on a $65 million annual travel, entertainment and meetings spend while following rigorous federal guidelines. “We have had three audits so far, two outside and one internal, and they have deemed the policy successful,” he says.
    About 4,000 miles away, in Irvine, Calif., Bill Layton faced a similar situation one that led him to become the unlikely hero of his company’s meetings department. As director of finance for Irvine, Calif.-based Allergan, a global pharmaceutical company and manufacturer of Botox, Layton admits he never gave much thought about the role of meetings in the company’s day-to-day operations.
    That all changed one day in fall 2002, when one of the company’s planners knocked on his door with two contracts in hand one that she had negotiated, and another that had been signed by an administrative assistant. While the contracts were for two different groups, both were with the same hotel, over the same dates. The problem? The administrative assistant’s meeting had a room rate $75 higher than the meeting planner’s rate.
    Being a “numbers guy,” says Layton, his interest was immediately peaked, and he decided to take a look at Allergan’s meeting planning process. “There wasn’t any,” he recalls. “We had 50 different people booking meetings, including 21 third-party planners, and we were missing out on huge savings opportunities.” The solution? Similar to Ernest Guerra’s mission, Layton knew it was time to create a management-sanctioned meetings policy to control and track Allergan’s $5 million annual meeting spend.
     “We needed to have everyone in one place, on the same page, doing the same thing,” says Layton, who last November debuted the formalized guidelines. “I honestly think that with this standardized process in place, I am looking at 20 to 30 percent in savings. That represents millions of dollars.”
    A good meetings policy might drive cost savings, but that is not the only benefit or incentive for creating one, say experts. Corporate reckoning with the Sarbanes-Oxley Act, also known as SOX, is playing a significant role. The measure, which was passed by Congress in 2002 with a mandatory compliance deadline of Nov. 15, 2004, requires CEOs and CFOs to sign off on the accuracy of their companies’ filings with the U.S. Securities and Exchange Commission (for more details, see “SOX at a Glance”).
    This means keeping a closer eye on meetings spend, which typically represents the second or third largest item in a company’s total revenue, notes Mark Williams, managing consultant for Tampa, Fla.-based IBM Business Consulting Services. Meeting planners should be taking the lead in pushing management to endorse standardized practices in their departments, he says, adding, “You need to know the level of spend you are responsible for and align yourself with the person in the company in charge of SOX compliance.”
    For many firms, that means turning closer attention to the meeting planning process. In fact, a recent study by Northcross, Ga.-based Windward Marketing Group found 42 percent of companies surveyed intend to create a meetings policy, with 20 percent citing “reduced exposure to financial and security risk” as the reason. The small-scale study queried 20 U.S. corporations with an average annual meeting spend of $19 million.