 |  Periodic editorials concerning everything from the very worst industry—from an annual report standpoint, that is—to what's wrong with the Fourth Estate. Reporters who can't hit an accuracy with a cannon. |
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| Periodic editorials concerning everything from the very worst industry—from an annual report standpoint, that is—to what's wrong with the Fourth Estate. Reporters who can't hit an accuracy with a cannon. |
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"Hogwash," says the annual report guru of the new transparency efforts
Such a hullabaloo, such a to-do concerning the of-the-moment movement, corporate governance, sometimes generically referred to as transparency in the corporate suite. A move to ensure that CEOs at a minimum would join the chief financial officer in assuming his (seldom "her") rightful share of responsibility for the financials. The Sarbanes-Oxley Act, enacted amidst great fanfare; assurances that, once and for all, corporate America would shape up, quit cooking the books, cease rewarding analysts' firms for their glowing "buy" recommendations on their corporate clients, from having conflict-of-interest involvement involving members of the board of directors. Sure. And, as in the fairy tale, one might fall down a hole in the ground but be rescued no worse for the incident. Those who read my monthly (since September 1983) Newsletter on Annual Reports know that, at best, there's lip service being paid Sarbanes-Oxley. Examples are cited; companies ranging from Cincinnati's Cinergy to Seattle's Safeco have heeded the government's push for purer CEOs and those in accounting, the latter far better than the former. Some numbers: We began monitoring, among 1990 annuals, management's assumption of responsibility for the financials. That year, 55%—more than half—took that step in their annuals. It was as low as 41.6% a year ago, just under 45% so far among 2002s. Meaning? More than half the CEOs today, congressional edict or no, decline to sign off on integrity of the financials. Oft as not, no signature whatsoever appears – not even of the CFO. I sent an advance copy of Pg. 1 of the May issue, heralding the failure of this latest government admonition, to the Securities and Exchange Commission. After more than a week, nary a peep has been forthcoming from the august body. I'm not holding my breath. Those more sophisticated than I no doubt would observe: "Cato, you didn't really believe this would result in increased honesty, that a government edict would make virgins of all those previously play-it-loose CEOs, did you?" Poor, naïve Sid. |
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