CFOs, those who aspire to be CFOs and internal and external auditors
Experience reading or composing management's discussion of operations
“Numbers report results but words reveal the integrity of leadership and the corporate culture.”
Accountants tend to be more interested in financial statements and footnotes than the CEO letter which accompanies the financial statements. We like quantifiable facts and data. Management’s discussion of results, on the other hand, is “squishy,” intangible and, arguably, not measurable. In this seminar we will learn how to analyze management’s discussion of results to predict the organization’s long-term success or failure.
Laura Rittenhouse developed a methodology called Rittenhouse Rankings in which she reviews all shareholder correspondence and annual reports from 100 companies. She looks for the difference between candor and quantifiable objectives in this correspondence vs. FOG, Fact-deficient, Obfuscating Generalities such as clichés, jargon, hyperbole and weasel words. The result is a “candor score” for each of the 100 company reports she analyzes annually. She then correlates the candor scores with share performance. Her methodology predicted the collapse of both Enron and the fall of Lehman Brothers. Trust is the foundation for long-term business success. Candor is the language of leaders who choose to be trusted.
Delivery Method: Individual webcast
CPE Credit: Accounting
Program Level: Intermediate