Groupon Shuffles Board to Cope with Accounting Concerns
Group discount site Groupon has appointed two directors to its board to add more financial expertise after the company admitted to a financial restatement.
The Chicago-based company said in the annual report it released in March that it would need to revise its revenue and net income for the fourth quarter (see Groupon Shares Plummet after Site Admits Accounting Problems). Its auditor, Ernst & Young, had found material weaknesses in Groupon’s internal controls. The company had gone public last year after coming under investigation by the Securities and Exchange Commission for using a non-standard accounting measurement, adjusted consolidated operating income, in its prospectus, which it needed to revise (see SEC Raises Questions about Groupon Accounting).
The various accounting problems prompted observers to call for better accounting expertise on the four-year-old company’s board and audit committee (see Groupon Accounting Problems Put Spotlight on Board).
On Monday, the company announced that it has appointed two new directors to its board, American Express CFO Daniel Henry and Deloitte LLP vice chairman Robert Bass. Both will serve on the audit committee, which is chaired by former AOL executive Ted Leonsis. Henry will replace Starbucks chairman and CEO Howard Schultz on Groupon’s board, while Bass will replace Kevin Efrusy of the venture capital firm Accel Partners after Bass retires from Deloitte in June.
Henry has been CFO of American Express since October 2007. Bass has been vice chairman of Deloitte since 2006 and a partner since 1982. “With their deep financial, accounting and operational experience, Dan and Bob will provide invaluable expertise to the board going forward,” said Groupon chairman Eric Lefkofsky.
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