Sid Cato -- March 2003 Quiz Answers

(Answers for March 2003)

1. You've universally praised the Disney report because you get free tickets to Disney World. True or false?
Answer: Decidedly false. On the contrary, for the last decade I've had little if anything positive to say concerning the Walt Disney report. I view its Bigfoot CEO as truly "a legend in his own mind." Not only do I see his report perennially as insufficiently forthright, but his letter to stockholders over the years has averaged twice so long as the average worldwide.

2. Hot as you claim your annual "International Annual Report Conference" is, few attendees come back for more; that is, repeat as attendees. True or false?
Answer: Again, false. Already nearly half a hundred are signed up for Charleston Sept. 10-12, our 15th annual fall event—all of them repeat-attendees. Companies from AT&T Wireless to Unisys, with AFLAC, Ford, IBM, Marathon Oil, ChevronTexaco and Lear (and similar big names) in between.

3. You take issue with the current emphasis on "Corporate Governance." True or false?
Answer: I think that theoretically, it's a marvelous idea. Trouble is, it's not working. As I understand things, the government is demanding that companies' top officers accept responsibility for the financials—not just the chief financial officer. The reality is that in some instances, there is no management signoff whatsoever; no officer affixes his or her signature, attesting to the accuracy and reliability of the numbers. A notable exception is Illinois-based CLARCOR, whose management's assumption bore the signatures of its chairman/president/CEO (one person), as well as its vice president for finance (its chief financial officer) and its VP—controller. Just over two in five firms so far (with their 2002 reports) present management's signoff whatsoever. 43.2%, to be precise. Meaning, 57% don't bother, government edict or no.

4. You've long railed against use of "pickup photos" in annuals—pictures, as you put it, "culled from dusty photo files deep in the bowels of a company." True or false?
Answer: True, I've railed. False that my railing has had a positive effect. Among early-arriving 2002s, one in eight reports went the pickup-photo route.

5. If your criteria are so stringent, then why are so many annuals making your "world-class" list?
Answer: My copyrighted criteria indeed are stringent. But it's false that many are soaring with the eagles, scoring at least 100 of a potential 135 points. To date, of the 44 reports I've received, and analyzed in depth, only three have scored at least 100 points.

6. It's amazing that, of all the reports you've analyzed, few if any duplicate their themes. True or false?
Answer: False—many do duplicate themes. In fact, in the March issue of my monthly Newsletter on Annual Reports, I relate that a 2002 report, from Royal Bank of Canada, has on its cover "Building on Our Strengths." That's the very same theme Mobil Corp. ran on its report cover back in 1991, would you believe. Five companies duplicated (a polite word for "copied") the Mobil theme a year later, in their 1992 reports. A year later, among 1993s, more than three dozen companies fronted their annuals with themes using the very same key words—either "strength" or "building"—Mobil used.

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	1.	You've universally praised the Disney report because you get free tickets to Disney World. True or false? *Answer:* Decidedly false. On the contrary, for the last decade I've had little if anything positive to say concerning the Walt Disney report. I view its Bigfoot CEO as truly "a legend in his own mind." Not only do I see his report perennially as insufficiently forthright, but his letter to stockholders over the years has averaged twice so long as the average worldwide.

	2.	Hot as you claim your annual "International Annual Report Conference" is, few attendees come back for more; that is, repeat as attendees. True or false? *Answer:* Again, false. Already nearly half a hundred are signed up for Charleston Sept. 10-12, our 15th annual fall event—all of them repeat-attendees. Companies from AT&T Wireless to Unisys, with AFLAC, Ford, IBM, Marathon Oil, ChevronTexaco and Lear (and similar big names) in between.

	3.	You take issue with the current emphasis on "Corporate Governance." True or false? *Answer:* I think that theoretically, it's a marvelous idea. Trouble is, it's not working. As I understand things, the government is demanding that companies' top officers accept responsibility for the financials—not just the chief financial officer. The reality is that in some instances, there is no management signoff whatsoever; no officer affixes his or her signature, attesting to the accuracy and reliability of the numbers. A notable exception is Illinois-based CLARCOR, whose management's assumption bore the signatures of its chairman/president/CEO (one person), as well as its vice president for finance (its chief financial officer) and its VP—controller. Just over two in five firms so far (with their 2002 reports) present management's signoff whatsoever. 43.2%, to be precise. Meaning, 57% don't bother, government edict or no.

	4.	You've long railed against use of "pickup photos" in annuals—pictures, as you put it, "culled from dusty photo files deep in the bowels of a company." True or false? *Answer:* True, I've railed. False that my railing has had a positive effect. Among early-arriving 2002s, one in eight reports went the pickup-photo route.

	5.	If your criteria are so stringent, then why are so many annuals making your "world-class" list? *Answer:* My copyrighted criteria indeed are stringent. But it's false that many are soaring with the eagles, scoring at least 100 of a potential 135 points. To date, of the 44 reports I've received, and analyzed in depth, only three have scored at least 100 points.

	6.	It's amazing that, of all the reports you've analyzed, few if any duplicate their themes. True or false? *Answer:* False—many do duplicate themes. In fact, in the March issue of my monthly Newsletter on Annual Reports, I relate that a 2002 report, from Royal Bank of Canada, has on its cover "Building on Our Strengths." That's the very same theme Mobil Corp. ran on its report cover back in 1991, would you believe. Five companies duplicated (a polite word for "copied") the Mobil theme a year later, in their 1992 reports. A year later, among 1993s, more than three dozen companies fronted their annuals with themes using the very same key words—either "strength" or "building"—Mobil used.