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
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
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.