PR Newswire's Disclosure Advisory Board, a 15-person council of leaders in the corporate, regulatory, investor, reporting and academic communities, announced today its 2007 recommendations for disclosure and corporate guidance.
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In a white paper titled, "Guiding Investors & Analysts: How Much Information is Enough?" the Board contends that guidance is beneficial to company and investor, alike, and should be a cornerstone of all corporate disclosure policies.
"We at the Disclosure Advisory Board believe that clear, consistent guidance presents significant benefits to the global marketplace and should be a practice of all public companies," said Mark Hynes, managing director of Global Investor Relations Services for PR Newswire and a member of the Disclosure Advisory Board. "For investors, guidance delivers a 360-degree view of a company and helps to create an informed investment market. For companies, a combination of qualitative and quantitative guidance provides the means to clearly communicate one's business objectives and milestones in both the near and long term.
"Given these assertions, the Disclosure Advisory Board advocates a more comprehensive approach to corporate guidance that provides a strategic, 'big picture' perspective - one that transcends regulatory and compliance directives to offer investors, stakeholders and the public at large a truly accurate depiction of a company," Hynes added.
Specific recommendations in the Disclosure Advisory Board white paper include:
* All companies - large and small - should issue regular guidance.
However, guidance is not an all or nothing proposition. One size of
guidance does not fit all.
* Guidance should provide clear, consistent communication about an entire
business. It should take into account qualitative and quantitative
measures and be comprised of both company-specific and industry-specific
information.
* Concerns that guidance overemphasizes short-term performance are
overblown. The benefits of guidance far out-weigh the perceived risks.
* As financial markets around the world converge, and more companies
contemplate listings outside the U.S., robust guidance will provide
investors with comparable information with which to evaluate issuers.
U.S. companies wishing to compete for global capital may need to
consider disclosure that will put them on par with companies based
elsewhere.
* The decline in sell-side coverage is creating an opportunity for greater
communication from public companies. According to a survey by the
National Investor Relations Institute, approximately 35% of NYSE and
NASDAQ companies have no analyst coverage.
* Fuller disclosure can combat unwanted hedge fund interest. Companies
with concerns about the potential volatility that hedge funds can create
may be able to forestall hedge fund behavior with better guidance.
* Appropriate guidance enables companies to benefit from fairer valuations
and lower capital costs.
* Over time, good disclosure will bring integrity back to the market.
To learn more about the Disclosure Advisory Board and request a copy of the complete white paper, please visit http://disclosureadvisoryboard.mediaroom.com/. To read Mark Hynes' blog, go to http://transparencymatters.blogspot.com/.
Anna Sussman, director, Investor Relations and Corporate Communications, Pharmion Corporation and a member of the Disclosure Advisory Board, concluded, "Each public company must determine the best way to tell its story to the outside world. Factors affecting a company's business and its industry clearly should drive investor communications. That is why we recommend a more comprehensive approach to corporate guidance. No matter how the market or regulations change, guidance enables companies to exert control over how their vision and strategy is understood by investors."
About the Disclosure Advisory Board
The Disclosure Advisory Board was brought together by PR Newswire in June 2006 to assess and comment upon the state of corporate disclosure and transparency. Comprised of 15 individuals with a combined 450 years of regulatory and compliance experience, the aim of the Board is to debate current disclosure and governance issues, and based on the discussions, propose "best practices" for improved financial and corporate reporting. The Disclosure Advisory Board believes that communication - disclosure and transparency - lies at the heart of winning back public consent.
In addition to Hynes and Sussman, members of the panel are: John Bierbusse, corporate director and retired equity research analyst at A G Edwards; Janet Fisher, partner, Cleary Gottlieb Steen & Hamilton LLP; Valerie Haertel, VP/director of investor relations, Medco Health Solutions, Inc.; Jerry Hostetter, VP/director of public relations and investor relations, Smithfield Foods Inc.; Deborah Kelly, partner, Genesis Inc.; Jack L. Kelly, co-head, industrial research team, Goldman Sachs; Mary Beth Kissane, president and founder, Corporate Perception Research; Sam Levenson, SVP Investor Relations, Sony Corporation of America; William A. Relyea, managing director, H.C. Wainwright & Co., Inc.; Diane Salucci, SVP, Bear Wagner Specialists LLC; Kurt Stocker, member of the board of directors of NYSE Regulation, Inc. and chairman of the New York Stock Exchange Individual Investors Advisory Committee; Louis M. Thompson, Jr., partner, Genesis Inc., and managing director, Kalorama Partners, and former CEO, president and board member of the National Investor Relations Institute.
About PR Newswire
PR Newswire Association LLC (http://www.prnewswire.com/) provides electronic distribution, targeting, measurement and broadcast services on behalf of tens of thousands of corporate, government, association, labor, non- profit, and other customers worldwide. Using PR Newswire, these organizations reach a variety of critical audiences including the news media, the investment community, government decision-makers, and the general public with their up- to-the-minute, full-text news developments.
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Contact: Rachel Meranus Vice President, Public Relations PR Newswire 212.282.1929rachel.meranus@prnewswire.com
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