Sid Cato -- August 2003 Quiz Answers

(Answers for August 2003)

1. Best thing that ever happened to annual reports is the Sarbanes-Oxley Act. True or false?
Answer: False. Government meddling only served to give the slippery among us an out—to flat-out misinterpret the act's intention, thus wreaking havoc on the annual report to shareholders. Annuals were progressing, doing pretty well—until this year, that is. More and more companies put out not a document that communicated a company's flavor, but the legalistic Form 10-K, which never was intended for public consumption.

2. No one really is able to interpret Sarbanes-Oxley to your satisfaction. True or false?
Answer: Well, true, sort of. But in the July-August issue of my newsletter I devoted more than page to one person's interpretation, which I choose to believe. He's not only an attorney, but a corporate secretary of an honorable East Coast public utility.

3. After a report producer attends one of your annual conferences, his or her subsequent report—well, in your words, "soars with the eagles." True or false?
Answer: Would that it were so; sadly, it's not. Take Fisher Scientific. Its producer attended last fall's conference in Chicago, impressed as highly capable, and sharing our concern regarding this key corporate communiqué. Yes, her report improved year to year—but by a measly point. Nicely designed (by another conference attendee), but still far from "world-class" status (those to score at least 100 of a potential 135 points).

4. Maybe the problem is that annual report budgets have been "sliced to the bone," as they say. True or false?
Answer: False. Budgets, my 18th annual Producer Poll indicates, average about $1 million, the per-copy investment running around $4. Ratio of copies printed per shareholder stands at 1.7; it was a not-much-greater 1.96 18 years earlier.

5. Say what you will, CEOs still are actively involved in their companies' annuals; and most actually are credited with writing their letter to shareholders. True or false?
Answer: True. And false. Eighteen years ago, two-thirds of CEOs were said to play an active role in the document; today, that stands at 93% who do, according to producers. But where six years ago 57% of CEOs were said to have written their own letter to shareholders, today's that's off to three in 10. 31%.

6. Companies tend to be inconsistent with their annuals, especially if they rotate personnel. True or false?
Answer: False. One could assume that to be true, but Unisys is the exception: It has had a new producer, it seems, every year. Yet, it has achieved "world-class" status seven straight times, now.

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Test your knowledge by taking previous monthly quizzes


	1.	Best thing that ever happened to annual reports is the Sarbanes-Oxley Act. True or false? *Answer:* False. Government meddling only served to give the slippery among us an out—to flat-out misinterpret the act's intention, thus wreaking havoc on the annual report to shareholders. Annuals were progressing, doing pretty well—until this year, that is. More and more companies put out not a document that communicated a company's flavor, but the legalistic Form 10-K, which never was intended for public consumption.

	2.	No one really is able to interpret Sarbanes-Oxley to your satisfaction. True or false? *Answer:* Well, true, sort of. But in the July-August issue of my newsletter I devoted more than page to one person's interpretation, which I choose to believe. He's not only an attorney, but a corporate secretary of an honorable East Coast public utility.

	3.	After a report producer attends one of your annual conferences, his or her subsequent report—well, in your words, "soars with the eagles." True or false? *Answer:* Would that it were so; sadly, it's not. Take Fisher Scientific. Its producer attended last fall's conference in Chicago, impressed as highly capable, and sharing our concern regarding this key corporate communiqué. Yes, her report improved year to year—but by a measly point. Nicely designed (by another conference attendee), but still far from "world-class" status (those to score at least 100 of a potential 135 points).

	4.	Maybe the problem is that annual report budgets have been "sliced to the bone," as they say. True or false? *Answer:* False. Budgets, my 18th annual Producer Poll indicates, average about $1 million, the per-copy investment running around $4. Ratio of copies printed per shareholder stands at 1.7; it was a not-much-greater 1.96 18 years earlier.

	5.	Say what you will, CEOs still are actively involved in their companies' annuals; and most actually are credited with writing their letter to shareholders. True or false? *Answer:* True. And false. Eighteen years ago, two-thirds of CEOs were said to play an active role in the document; today, that stands at 93% who do, according to producers. But where six years ago 57% of CEOs were said to have written their own letter to shareholders, today's that's off to three in 10. 31%.

	6.	Companies tend to be inconsistent with their annuals, especially if they rotate personnel. True or false? *Answer:* False. One could assume that to be true, but Unisys is the exception: It has had a new producer, it seems, every year. Yet, it has achieved "world-class" status seven straight times, now.