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Roundtable on Corporate Disclosure
Author(s) -
Don Chew,
John R. Graham,
Trevor Harris,
Amy P. Hutton,
Charles Kantor,
Tom King,
Rick Passov,
Erik R. Sirri,
Joe Willett
Publication year - 2004
Publication title -
journal of applied corporate finance
Language(s) - English
Resource type - Journals
eISSN - 1745-6622
pISSN - 1078-1196
DOI - 10.1111/j.1745-6622.2004.00006.x
Subject(s) - distrust , temptation , earnings , equity (law) , business , accounting , earnings management , corporate finance , value (mathematics) , public relations , economics , finance , political science , law , psychology , social psychology , machine learning , computer science
In an article published in this journal two years ago titled “Just Say No to Wall Street,” Harvard's Michael Jensen and The Monitor Group's CEO Joseph Fuller urged companies to put an end to what they called the “earnings guidance game.” Instead of earnings forecasts, Jensen and Fuller recommended that companies provide investors with information about their strategic goals and value drivers, and about the risks associated with carrying out those goals and management's plans to manage those risks. In this roundtable, a group of corporate executives, equity analysts, and academics explore the possibility that companies can increase their values by resisting the temptation to “manage” earnings, committing to expanded disclosure, and engaging investors in a more strategic dialogue. By establishing such a dialogue, companies may be able to break out of the current “bad equilibrium” in which markets distrust managers and managers distrust markets.