1993 Accounting Hall of Fame Induction: Richard T. Baker with introduction by Ray J. Groves (Chairman, Ernst & Young); Induction citation by Thomas J. Burns (Deloitte and Touche Professor, The Ohio State University); Response by Richard T. Baker (Chairman Emeritus, Ernst & Whinney

Baker, Richard T.

Burns, Thomas Junior

Groves, Ray J.

English

eGrove (Univ. of Mississippi)

Accounting Historians JournalVolume 21Issue 1 June 1994 Article 1419941993 Accounting Hall of Fame induction : RichardT. Baker Accounting Hall of Fame membership[1993]Ray J. GrovesThomas Junior BurnsRichard T. BakerFollow this and additional works at: https://egrove.olemiss.edu/aah_journalPart of the Accounting Commons, and the Taxation CommonsThis Article is brought to you for free and open access by the Archival Digital Accounting Collection at eGrove. It has been accepted for inclusion inAccounting Historians Journal by an authorized editor of eGrove. For more information, please contact egrove@olemiss.edu.Recommended CitationGroves, Ray J.; Burns, Thomas Junior; and Baker, Richard T. (1994) "1993 Accounting Hall of Fame induction : Richard T. BakerAccounting Hall of Fame membership [1993]," Accounting Historians Journal: Vol. 21 : Iss. 1 , Article 14.Available at: https://egrove.olemiss.edu/aah_journal/vol21/iss1/14The Accounting Historians Journal Vol. 21, No. 1 June 1994 1993 ACCOUNTING HALL OF FAME INDUCTION: RICHARD T. BAKER INTRODUCTION by Ray J. Groves Chairman, Ernst & Young Richard T. Baker is best described as a great leader in ev-erything he has done: athletics, business, civic and charitable, education, and professional. Dick Baker's leadership is exemplified by his unique ability to urge his colleagues to perform to their highest potential. Characteristic of a good leader, he achieved by providing others the opportunity and encouragement to achieve, and then by giv-ing them the recognition for their accomplishments. Progressing rapidly in the profession during a period when there were major distinctions between partners and staff, Dick continually strived to reduce these barriers. He was very suc-cessful in developing a collegial environment in Ernst & Ernst, where every person was treated with respect for their respective individual abilities regardless of their position. The result was the improved realization of everyone's talents. Long a strong proponent of education, Dick led his firm to design, construct, and staff an education center for the pro-fessional education of its people, as well as for others in the academic and business community. He also encouraged con-tinuing education throughout a person's professional career, re-alizing that rapid changes in the business environment required that each professional's skills be continually updated and en-hanced. Dick Baker always encouraged the profession to address and resolve its challenges and problems through its own efforts rather than by looking to the government. He believes that the private sector is capable of making even greater contributions to our economy and our well being through utilizing and organiz-ing the many capabilities of its private citizens. Throughout his 1Groves et al.: 1993 Accounting Hall of Fame induction : Richard T. Baker  Accounting Hall of Fame membership [1993]Published by eGrove, 1994276 The Accounting Historians Journal, June 1994 career, Dick freely gave his personal time and resources to many civic, business, and educational leadership positions. In summary, Dick is a man who has challenged himself and others to achieve their personal best, while always being fair to and respectful of every person. It is a personal privilege and pleasure to know him and to have worked with him. 2Accounting Historians Journal, Vol. 21 [1994], Iss. 1, Art. 14https://egrove.olemiss.edu/aah_journal/vol21/iss1/141993 Accounting Hall of Fame Induction 277 INDUCTION CITATION by Thomas J. Burns Deloitte and Touche Professor The Ohio State University Always a leader, his lifetime, like Gaul, can be divided into three parts, each one crowned with distinction and widespread recognition. In the first phase, he achieved the ambition of ev-ery American schoolboy to become a national champion athlete. In his maturity, he rose through the ranks of his public account-ing firm to become its managing partner and worldwide leader for over a dozen years during a period of increased awareness of an accounting information, great professional growth, and ma-jor social change. In the third phase, for a fifteen year period, he served on the boards of directors of seven Fortune 500 compa-nies (none of which were clients of Ernst & Ernst). In 1986, he was selected by the National Association of Corporate Directors as the Outstanding Director of the Year. On all seven compa-nies, he was chairman of their increasingly powerful audit com-mittees. Now retired from all boards except one, he plays golf, fishes, and hunts a little and has time to enjoy the accomplish-ments of others including those of his four college degreed chil-dren and playwright son. He also keeps close tabs on the pronouncements of the Financial Accounting Standards Board. Born during World War I in Anderson, Indiana, he was educated in a one-room school house through the sixth grade. He was the youngest of three sons of a father who worked for General Motors-Delco Remy Division for 35 years at a managerial level. In Anderson High School, Dick achieved the dream of every Indiana youth. In his senior year, he starred on the basketball team which won the state championship and was named on the all-state team. He came to Ohio State with only a waiver of the out-of-state tuition to play basketball and to major in accounting. He worked part-time as an assistant trainer to support himself for four years. His many honors included being elected presi-dent of his fraternity, president of an all-university honorary and president of his senior class. He was on the basketball team from his sophomore year on. In his senior year, he led the team to the Big Ten Championship and received Ail-Ameri-can honors. The team was defeated in the final game of the 3Groves et al.: 1993 Accounting Hall of Fame induction : Richard T. Baker  Accounting Hall of Fame membership [1993]Published by eGrove, 1994278 The Accounting Historians Journal, June 1994 first National College Championship in 1939. After graduation, the only one of his family to do so, he married Marty, the Ohio State senior prom queen, who con-tinues as his wife over 50 years later. In 1939, the country was still recovering from the Great Depression, jobs in public ac-counting were difficult to get and notwithstanding his academ-ic record, he went with Goodyear. Six months later, he was hired temporarily with the firm A. C. Ernst had started in Cleve-land in 1903. After the busy season, the firm let go many of the temporary hires, but not, of course, Dick Baker. He rose through the ranks, still as a temporary hire, until he became managing partner, a post he held for 13 years. He refined A.C.'c concepts with emphasizing client services by having the most offices of a firm, always offering management services, and by stressing interaction of its members with its clients, the busi-ness community, and beyond. During four wars and thirty-seven years with the firm, he switched the firm's role from avoiding involvement in national and global accounting policy to one of being the most effective and respected participants in these matters. He faced an ever increasing demand for reliable and comprehens ive financial informat ion. This r ising d e m a n d brought about increasingly active capital markets and the ex-pansion of American business. Accounting became front page news as society pressed through courts and Congress for more publicly available accounting. He led his firm to become a lead-ing participant in meeting these challenges and in vindicating the accounting profession as a vital and effective private-sector financial information function. The firm's direct involvement was supported by extensive and widely disseminated publi-cations. Examples of programs, once unique, were the faculty assistance program for minority colleges, a leave of absence — salary continuation, annual academic seminars, schools of ac-counting, and accounting accreditation. His leadership dem-onstrated an understanding of social issues and the needs of education. For decades he has shown extraordinary leadership in the voluntary sector now called United Way. He has long been active in Blue Coats, Inc., an organization which gives assistance to families of police and firemen killed in the line of duty. He helped arrange the Metropolitan Opera cross country tours. He served on the founding Ohio Board of Regents which formulated a master plan for higher education in Ohio. With-out parallel, for his dedication as an alumnus, he has been 4Accounting Historians Journal, Vol. 21 [1994], Iss. 1, Art. 14https://egrove.olemiss.edu/aah_journal/vol21/iss1/141993 Accounting Hall of Fame Induction 279 awarded two honorary doctorates and was named as the Na-tional Public Accountant of the Year. Without peer for achieving equilibrium of the firm's profes-sional integrity, professional innovation and entrepreneurial competitiveness, he is the 53rd Accounting Hall of Fame Mem-ber, RICHARD THOMAS BAKER. 5Groves et al.: 1993 Accounting Hall of Fame induction : Richard T. Baker  Accounting Hall of Fame membership [1993]Published by eGrove, 1994280 The Accounting Historians Journal, June 1994 RESPONSE by Richard T. Baker Chairman Emeritus Ernst and Whinney Many thanks, for those very nice comments about me. I am reminded of the time that Ohio State invited our 1939 Big Ten champion basketball team back to celebrate our fiftieth year reunion. It was fun to be back with my former team-mates to reminisce about old times and before the weekend was over we weren't even missing any of our warm-up shots. Nothing was said about our losing the final game to Ore-gon State in the very first NCAA tournament . Thankfully, our memories over t ime have a tendency to treat us kindly and I must tell you they have pulled out all the stops today on my behalf. For a guy who is going to be 76 years old in less than a month, and is a loyal graduate of Ohio State University, this recognition is truly an unexpected honor. I am also indebted to all of you for coming here before breakfast, to help me celebrate this recognition. When I retired from Ernst & Ernst sixteen years ago, I re-ceived a binder of over sixty letters from college professors who were very close personal friends of mine. This binder had been prepared by Don Edwards. I miss those associations that had been so beneficial to me during the years that I was with E&E. As mentioned, after my retirement from E&E, I began a second career by going on the Boards of Directors of some out-standing companies, including General Electric, Hershey Foods, Anheuser-Busch, International Paper, Textron, and Louisiana Land & Exploration. It has been a wonderful way of extend-ing my usefulness to the business community and has given me an excellent opportunity to see the other side of the fence as far as business is concerned. Last, but not least, it has paid very well. I think that is enough about my career and now I would like to devote the remainder of my time discussing your careers and the possible ways that you might enhance them somewhat in the same way that I did mine. Let me first give you my view as to the way things are now and why it offers you new opportu-nities to continue doing what you now are doing and supple-6Accounting Historians Journal, Vol. 21 [1994], Iss. 1, Art. 14https://egrove.olemiss.edu/aah_journal/vol21/iss1/141993 Accounting Hall of Fame Induction 281 menting it by going on some boards of directors of public com-panies. This may not appeal to all of you, but it certainly should appeal to some of you. I am not sure how many of you are now serving on boards of public companies, but I am confident that you all have the basic training and talent to make outstanding board members. Here are some of the reasons that this opportunity is more available to you than ever before. There are many changes in the way our business community is being challenged including the basic concept of the governance of our publicly-owned cor-porations. Here is just a brief outline of some the significant changes: 1. The Board of Directors is no longer comprised primarily of CEOs of other public companies with basic overlaps being the norm, rather than the exception. 2. In a large majority of cases, the CEO is restricted from being on more than one or two other public companies. 3. No longer are the lawyers, bankers and suppliers who work with the corporation automatically considered prime can-didates for the board. 4. Institutional investors are challenging the relationships of the CEO and the board members. 5. A few years ago, the certified public accountants added this sentence to their reports on financial statements: Quote "The management of the company is responsible for their finan-cial statements." 6. Corporations are being forced to make a decided effort to get a broad-gauged board which can deal with the many new complicated problems, such as the vast government regulations, the increasing number of lawsuits, international operations, and the ongoing accounting changes prescribed by the Financial Ac-counting Standards Board. If I could digress for just a minute — Dennis Beresford, Chairman of the FASB, is with us this morning. Denny, for many years, was a partner with E&E and is now in his second term and is doing an outstanding job as Chairman. It's not easy being a member of that board. Imagine the difficulty of explain-ing the current issue — accounting for stock-based compensa-tion — the exposure draft consists of exactly 100 pages of expla-nation of why and how this issue is to be handled. (Dennis Beresford, FASB Chairman), many of us remember 7Groves et al.:  Accounting Hall of Fame induction : Richard T. Baker  Accounting Hall of Fame membership [1993]Published by eGrove, 1994282 The Accounting Historians Journal, June. 1994 that General Eisenhower took the better part of one page to outline the successful battle plan for World War II! I have outlined six major reasons why the public com-panies are widening the field for directors and why professors of accounting should qualify for consideration. With the new responsibilities placed on management for the financial state-ments and the increasing complication of the accounting rules, management needs someone on the board that understands ac-counting in detail and can help protect the company by serving on the audit committee. The best sources of this talent are those that have spent their careers in accounting and foremost would be retired pub-lic accountants and teachers of accounting. You people qualify for this and the big question is how do you go about getting invited. This is complicated, but it can be done. First, please understand, you must initiate a program of getting acquainted with the management of the company. Sec-ond, you must demonstrate that you can be helpful! A classic example could be the contemplated change in the handling of accounting for stock-based compensation. Many companies are not pleased with the proposed change and would be delighted to have your input on it — especially if you really agree with them. Each of you should work out a program that you are com-fortable with. I am going to close by telling you of an incident tha t occurred shortly after I became the managing partner of E&E. A long time friend who had become president of a large com-pany called me and said that they were unhappy with their au-ditors and that they were going to make a change. I obviously was pleased and asked what do you want me to do? He replied "nothing, you make your friends before you need them." I hope you will take this suggestion seriously. I will be watching for your names on the proxy statements. Thank you very much. 8Accounting Historians Journal, Vol. 21 [1994], Iss. 1, Art. 14https://egrove.olemiss.edu/aah_journal/vol21/iss1/141993 Accounting Hall of Fame Induction THE ACCOUNTING HALL OF FAME MEMBERSHIP Year Member 1950 George Oliver May* Robert Hiester Montgomery* William Andrew Paton* 1951 Arthur Lowes Dickinson* Henry Rand Hatfield* 1952 Elijah Watt Sells* Victor Hermann Stempf* 1953 Arthur Edward Andersen* Thomas Coleman Andrews* Charles Ezra Sprague* Joseph Edmund Sterett* 1954 Carman George Blough* Samuel John Broad* Thomas Henry Sanders* Hiram Thompson Scovill* 1955 Percival Flack Brundage* 1956 Ananias Charles Littleton* 1957 Roy Bernard Kester* Hermann Clinton Miller* 1958 Harry Anson Finney* Arthur Bevins Foye* Donald Putman Perry* 1959 Marquis George Eaton* 1960 Maurice Hubert Stans* 1961 Eric Louis Kohler* 1963 Andrew Barr Lloyd Morey* 1964 Paul Franklin Grady* Perry Empey Mason* 1965 James Loring Peirce 1968 George Davis Bailey* John Lansing Carey* William Welling Werntz* 1974 Robert Martin Trueblood* 1975 Leonard Paul Spacek * Deceased (continued on page 222) 9Groves et al.: 19 3 Accounting Hall of Fame induction : Richard T. Baker  Accounting Hall of Fame membership [1993]Published by eGrove, 1994284 The Accounting Historians Journal, June 1994 THE ACCOUNTING HALL OF FAME MEMBERSHIP (Continued) 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 John William Queenan* Howard Irwin Ross* Robert Kuhn Mautz Maurice Moonitz Marshall Smith Armstrong Elmer Boyd Staats Herbert Elmer Miller Sidney Davidson Henry Alexander Benson Oscar Strand Gellein Robert Newton Anthony Philip Leroy Defliese Norton Moore Bedford Yuri Ijiri Charles Thomas Horngren Raymond John Chambers David Solomons Richard Thomas Baker * Deceased 10Accounting Historians Journal, Vol. 21 [1994], Iss. 1, Art. 14https://egrove.olemiss.edu/aah_journal/vol21/iss1/14

1993 Accounting Hall of Fame induction : Richard T. Baker  Accounting Hall of Fame membership [1993]

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1993 Accounting Hall of Fame induction : Richard T. Baker Accounting Hall of Fame membership [1993]

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