Surely, Sid finds most CEOs sufficiently forthright Whenever I get together with groups of civilians—for instance, women who work at a nationally recognized chain store—they ask the question: "Why do CEOs seem to—well, lie to us? Is it just our imagination?" I relate the story of Colgate's annual report, which 15 or so years ago made my list of world's 10 worst. Its communications director finally—finally!—took cognizance of that negative citation. She wanted to argue against my position. Fifteen or so years belatedly. I suggest she was a victim of the corporate-head-in-the-sand approach: In the first place, that kind of dishonest writing shouldn't have snuck into print. And if exception were taken to my blasting her report in print, then that disagreement shouldn't have been held for a decade and a half. So, I'm convinced, are most chief executive officers unmindful of where the truth ends and dishonesty begins. When a telecommunications giant based in Basking Ridge, New Jersey (which shall remain nameless; heh, heh), was told its annual report was "most attractive, but not honest," you'd have thought I had just told the CEO his—well, fly was open. "I can't believe you'd say that" to the executive vice president, I was admonished. All, I said, one has to do is say "The numbers don't look good; let me tell you why I and my compatriots in our plush corporate offices see them somewhat differently." That's all. I know for a fact, having been an officer of worldwide corporations, that one's livelihood is in jeopardy if he or she plans on telling the boss what he (or, seldom, she) doesn't want to hear. "But doesn't he know?" I used to ask, naively. That earnings were awful. That business was bad, and likely to worsen. This year—2001 annual reports, we're talking about—was the worst for honesty since I began monitoring this element. Back among 1988 annuals. All these years later, sufficient forthrightness has sunk to its lowest level: 80.7 percent. (Previous low: among 1998 reports, when the figure stood at 85.6 percent.) Meaning, one in five CEOs can't admit to the bad news. Aetna is a good example: Its year was awful, which fact the CEO alluded to in his letter to shareholders. With the words, "Despite financial results that were extremely disappointing to us and our shareholders, I am pleased to say we made notable progress on...three fronts: organize for success, improve business operations and set a new strategic direction." (He neglected to include, "Oh, yes, and make a dollar or two for you, the shareholder.") No financial highlights page up front (know that nine of 10 companies worldwide include one, brief or no). And what do I find when I go to Page 30 (of 36 pages) in this summary report (one in six truncated annuals, like Aetna's, isn't so identified on the report cover)? A negative earnings per share of either $2.03 or $1.95, depending on where one looks. A total loss more than twice the year-earlier performance, itself wanting. Three measly pages—out of 36 pages overall—devoted to the numbers, which is what the investor is interested in. No management's signoff required, there being essentially no financials. Let's see how our (make that your) administration in Washington treats CEOs who thus skirt its requirement, much bandied about, to require CEOs to sign off on their financials. What will Big Brother do in a case like this? (Actually, what Big Brother is talking about is the legalistic Form 10-K, while you and I mean a book, usually in more than one color, that communicates through various readership-soliciting techniques: the annual report to shareholders.) Back to honesty: Of all years, honesty being decidedly at a premium these days, I would have been crestfallen had my evaluations indicated great sincerity and disclosure by corporate chieftains, here and abroad, among 2001 reports. Instead, honesty has sunk to a 13-year low, having been monitored since 1988 annuals worldwide. Surprise, surprise.

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