Gartner on Investor Communication

The McKinsey Quarterly recently ran an interview here with Gartner CFO Christopher Laford. In the interview, he explained that:

When our new CEO, Gene Hall, joined, we established a long-term financial road map as a key element of our investor communications. We told our investors how we were running our businesses and where we thought we could drive performance over the long term-key measures, like revenue growth by business segment and margins.

And when we did that, we also identified the two or three metrics, for each segment, that would help investors understand Read more

People Who Don’t Get the Intangible Shift

Thanks to Presto Agitato here for pointing to the CATO Institute briefing paper here called, “FASB: Making Financial Statements Mysterious.”

The paper, by T.J. Rodgers, CEO, of Cypress Semiconductor Corporation expresses extreme frustration with the current state of financial statements. I share his frustration but don’t agree at all with his conclusions.

Rodgers says that Sarbannes Oxley was supposed to make accounting more transparent and it hasn’t. I would counter that it was supposed to make accounting more reliable and it has. One of the great accomplishments of Sarbox Read more

Intellectual Capital from the Analyst Point of View

This paper by the European Federation of Financial Analysts Society (EFFAS) is entitled, Principles for Effective Communication of Intellectual Capital, opens up with the statement:

High time for the financial community to tackle intangibles:

In developed economies today the most important factors associated with corporate competitiveness and growth are invisible. These intangible assets – collectively Read more

The Best Writing Yet on Intangibles from AICPA

I have read the latest white paper by Amy Pawlicki for the AICPA Assurance Services Executive Committee with great care and interest. The title is The Shifting Paradigm in Business Reporting and Assurance.  Here are the highlights. Read more

A New Approach to Annual Reports

I recently happened upon an interesting site that I somehow hadn’t found until now called Report Leadership.

It was a joint effort last year by the Chartered Institute of Management Accountants (CIMA), the Corporate Reporting group at PriceWaterhouseCoopers, and the design firm Radley Yeldar.

The group took it upon themselves to build a new annual report. The site explains their thought process and includes a sample web-based annual report for a fictitious company.

Having been a consumer of annual reports since my early career as a high risk lender, I can tell you Read more

AMD Smarter Split in Two

Last week, hidden amid all the financial news was the announcement that AMD would be splitting itself in two. One part will focus on cutting edge design of microprocessors. The other, to be called The Foundry Company will leverage AMD’s existing manufacturing base to provide scalable, high quality manufacturing services.The new deal is financed by new investments by the government of Abu Dhabi.

AMD is not the first company to consider this strategy. But it is a good illustration of the kind of intellectual capital management that even asset-intensive companies need to consider. The business of Read more

Gushing Black Ink on Income Statements

If there is one lesson of the current financial crisis, it is that strong balance sheets and income statements no longer tell investors enough about the performance of a company, whether it be a bank, a service or a product company.

Over the last few decades, technology has fueled a burst of knowledge creation that has allowed companies and economies all over the world to create greater and greater results using fewer and fewer physical inputs. Computers have made us smarter and more efficient. This has led to a problem in corporate valuation Read more

Training (and spending on intangibles in general) as an Investment?

Clive Shepherd asks whether spending on training is an investment in this thought-provoking post. He makes the comparison to spending on other kinds of business operations to highlight the challenges of going the investment route. Then he takes Read more