Mark Hynes - thoughts on corporate disclosure

Opinions on changing rules, changing best practices, and their effect on investor relations officers.

Tuesday, November 15, 2005

Regulators’ focus on management commentary deepens.

Of all the tasks in the lead up to “results day”, writing the management commentary is one of the most challenging and demanding for IRO’s. It is also one of the areas that is attracting interest from regulators around the world.
The latest interest is a discussion piece produced by the International Accounting Standards Board, which in effect tries to pull together all the work that has been done in this area. The basic idea from the IASB would be to create a set of requirements that would sit alongside nationally-based rules. These include the UK’s OFR, the Management Discussion and Analysis (MD&A) in the US and Canada, Management Reporting in Germany, and the overarching IOSCO recommendations on management reporting.
Rather than specifying disclosure requirements, the IASB have developed a
Management Commentary disclosure framework. This framework identifies the areas that management should consider when preparing and presenting MC.

The IASB has taken on a hugely ambitious task. Marrying all the different targets of regulators around the world, with a parallel set of requirements would be highly demanding. And the complexities of agreeing those common standards between the likes of the SEC, the FRC and BAFIN will be challenging, at a time when those regulators are already reviewing their national requirements. OFR is yet to win complete compliance (see post October 19th), and the SEC is saying the US issuers that they want to see MD&A’s more productive.

2 more areas play a role in this:

First, the fast developing use of key performance indicators, (KPIs). In its discussion paper the IASB quotes from a Deloitte survey last year that showed that "99 per cent of respondents agreed that financial indicators alone cannot adequately capture their companies' strengths and weaknesses". The Committee of European Securities Regulators (CESR) has picked up on this (see post on August 11th) and highlighted concerns that companies are using non standard performance measures, making it hard for investors to compare on a like for like basis. CESR has now issued “recommendations” – with no force in law – on the presentation of alternative performance measures. It defines these as non GAAP measures.

Second, the management commentary also fits with other global trends of providing different types of reporting. Non financial measures are top of agenda for many, with initiatives such as the Enhanced Business Reporting Consortium leading the way in creating a taxonomy to allow non financial measures to be delivered to investors in structured way that allows automatic analysis .

So IROs have indeed got their work cut out to represent the business fairly and accurately in the management commentary, as well as to stay compliant with all these new regulations.

10 Comments:

  • At 2:39 pm, Anonymous Anonymous said…

    Daylight Savings and the Pro Blogger Rhythm
    Daylight Savings has had a significant impact upon my blogging activities. A few weeks ago we put our clocks backward forward an hour to get an extra hour of daylight over our upcoming Summer.
    Find out how to buy and sell anything, like things related to instant road repair on interest free credit and pay back whenever you want! Exchange FREE ads on any topic, like instant road repair!

     
  • At 11:07 am, Anonymous Anonymous said…

    You've got a great blog here. Myself, I will be starting a blog shortly to complement my website on offshore platform foundation.

     
  • At 12:31 pm, Anonymous offshore company incorporation said…

    Mark Hynes, interesting post - this post.

    Personally, I've always found edison chouest offshore to be very intriguing, and interesting, but not always very informative. So I did some research and started my own webpage to help people get started with edison chouest offshore.

    If edison chouest offshore also piques your interest, come by when you've got a few seconds - check out the different resources listed. I'm sure you'll find it very interesting.

     
  • At 4:53 pm, Anonymous edison chouest offshore said…

    You've got a great blog here. Myself, I will be starting a blog shortly to complement my website on w t offshore.

     
  • At 5:56 pm, Anonymous edison chouest offshore said…

    You must have spent a lot of time putting together your blog. You must be proud of it.

    I am planning to start a blog soon - to go with my website on w t offshore.

    Do you have any advice for someone just starting their own blog?

    If you do, do you think you could post a quick message on your blog here so all of us could benefit from your wisdom?

    Thanks

     
  • At 1:20 pm, Anonymous offshore hedge funds said…

    Nice blog :)......Interesting post on this post. Personally, I've always been fascintated with offshore hedge funds, so I created a website not long ago called just that - offshore hedge funds.

    It'd be great if you were to drop by for a few seconds - have a look around, check out a few of the informative links I've got there.

     
  • At 5:37 pm, Anonymous offshore platform foundation said…

    Mark Hynes, interesting post - this post.

    Personally, I've always found to be very intriguing, and interesting, but not always very informative. So I did some research and started my own webpage to help people get started with .

    If also piques your interest, come by when you've got a few seconds - check out the different resources listed. I'm sure you'll find it very interesting.

     
  • At 5:12 pm, Blogger online2u said…

  • At 5:58 am, Anonymous Anonymous said…

    Bonjour tout le monde, je me permet de vous laisser un message sur votre blog pour vous informer qu'en surfant sur le net je suis tomb�e sur un site tr�s int�ressant et professionnel.
    A tous les amoureux des usa, d�sireux de cr�er votre soci�t�, il existe un �tat sans charges: le DELAWARE.un paradis fiscal!
    Et ce fameux site en question: USACOMPANYCORPORATION.COM, propose l'aide � la cr�ation de votre entreprise de A � Z, jusqu'� la cr�ation d'un compte bancaire aux �tats unis, sans m�me se d�placer.
    Apr�s avoir contact� le cabinet, je peux vous affirmer que ce dernier est on ne peut plus s�rieux, et je vous le recommande vivement.
    Vous pouvez foncer sans probl�me!
    Pour plus d'information, allez visiter le site http://www.usacompanycorporation.com.
    bonne visite et bonne chance � vous!

     
  • At 3:14 am, Anonymous Anonymous said…

    Bonjour a tous, si vous vous interesse au entreprise ,et que vous etes desireux de creer votre propre societe dans l'etat du delaware, aux etats unis, je vous conseille un site tres serieux:http://www.atrium-corporate.com.
    Celui ci propose de vous aidez dans toutes les etapes de la creation de votre entreprise de A a Z, jusqu'a la creation d'un compte bancaire, sans meme que vous vous deplaciez.
    Je suis actuellement en contacte avec le gerant du cabinet (fort consciencieux!!), et je peux vous affirmer que cela vaut le coup!!
    si vous avez des interroguations, ou si vous voulez en savoir plus, il vous suffit de consulter le site : http://www.atrium-corporate.com
    ou de contacter Mr Corona a l'adresse mail suivante:consultant@usa-corp.com
    Vous en serez d'avantage sur entreprise.
    En esperant vous rendre service.
    Bien a vous.

     

Post a Comment

<< Home