The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: Earnings Guidance

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Earnings Guidance: Contrasting Perspectives

Posted in Earnings Guidance
In a recent post (here), I discussed the recent work of two blue-ribbon groups focused on eliminating “short-termism” and recommending, among other things, the elimination of quarterly earnings guidance. The results of the National Investor Relations Institute’s 2007 Earnings Guidance Practices Survey (press release here, survey results here) suggest that more companies are shifting away … Continue Reading

Quarterly Earnings Guidance and D & O Risk

Posted in Earnings Guidance
As I have noted in prior posts (most recently here), there is a growing chorus of voices calling for the elimination of “short-termism,” and specifically, for the elimination of quarterly earnings guidance. The recently issued reports of two blue-ribbon groups underscore the need for companies to develop and maintain a long-term orientation. More specifically, both … Continue Reading

Reports About Earnings Guidance, Securities Litigation Frequency, and The D & O Insurance Marketplace

Posted in Corporate Governance, D & O Insurance, Earnings Guidance, Securities Litigation
Eliminate Quarterly Guidance? On July 24, 2006, the CFA Centre for Financial Market Integrity and the Business Roundtable Institute for Corporate Ethics issued a Report entitled "Breaking the Short-Term Cycle: Discussion and Recommendations on How Corporate Leaders, Asset Managers, Investers and Analysts Can Refocus on Long-Term Value," calling on corporate leaders, asset managers and others … Continue Reading

Earnings Guidance: Meet, Beat or Delete?

Posted in Earnings Guidance
The classic statement on the pitfalls of providing optimistic earnings guidance appeared in Warren Buffett’s Letter to Shareholders in the 2000 Berkshire Hathaway Annual Report (only an excerpt is reproduced here, but the entire Letter warrants reading, especially in light of subsequent events): The problem arising from lofty predictions is not just that they spread … Continue Reading