Even companies with pristine balance sheets and squeaky-clean reputations must occasionally dole out information their managements would rather keep quiet. In a world ruled by Regulation Fair Disclosure and instantaneous, ubiquitous communication, news travels far and fast. The trick is to manage the flow.
When restating earnings, 70.6 percent of chief financial officers say they let their investors and the public know by filing the change with the Securities and Exchange Commission. A second large group -- 50 percent -- say their companies issue a press release, while 44.1 percent host a conference call for analysts, investors and the press.
More-modern communication is growing, with 20.6 percent disseminating information via Webcast. Conference calls with a limited audience, or an analysts’ meeting conducted only by the CFO, garner less than 3 percent each.
More than 71 percent of respondents say they do not think a crisis management team would have helped some of the companies that have gotten into trouble lately. They say it is the CFO’s job to handle such problems. But 28.6 percent feel that crisis management specialists would have smoothed the flow of bad news. None of those surveyed think a public relations executive should take charge.
In an intriguing insight into access, 11.4 percent of CFOs say that the primary responsibility for communicating with the press falls to CEOs. None believe CEOs are the contact for analysts, and only 2.4 percent say CEOs are the spokesmen with institutional investors. The results reverse with CFO roles: 43.9 percent say institutional investors contact them for information. Likewise, 42.5 percent say CFOs have the primary responsibility at their companies for communicating with analysts. Only 6.8 percent say CFOs speak to journalists.
Who at your company has primary responsibility for communicating with the press?
The chief executive officer 11.40%
The chief financial officer 6.8
An investor relations executive 18.2
A public relations executive 56.8
Other 6.8
To whom does the press relations function report?
The CEO 38.60%
The CFO 20.5
Vice president of marketing 4.5
Legal officer 6.8
Corporate secretary 2.3
Other 27.3
Have you changed who is responsible for communicating with the press since the adoption of Regulation FD?
Yes 7.10%
No 92.9
Who at your company has primary responsibility for communicating with research analysts?
The CEO 0.00%
The CFO 42.5
An investor relations executive 57.5
A public relations executive 0
Other 0
To whom does the analyst relations function report?
The CEO 15.00%
The CFO 80
Other 5
Have you changed who is responsible for communicating with research analysts since the adoption of Regulation FD?
Yes 0.00%
No 100
Who at your company has primary responsibility for communicating with institutional investors?
The CEO 2.40%
The CFO 43.9
An investor relations executive 53.7
A public relations executive 0
Other 0
To whom does the institutional investor relations function report? The CEO 19.50%
The CFO 78
Vice president of marketing 0
Legal officer 0
Corporate secretary 0
Other 2.4
Does your company have a crisis management function?
Yes, an individual 4.50%
Yes, a committee 43.2
Yes, an external firm 2.3
No 50
If yes, when was it created?
Within the past year 22.70%
Two to five years ago 31.8
Five to ten years ago 18.2
More than ten years ago 27.3
If yes, to whom does this person or group report?
The board 9.10%
The CEO 77.3
The CFO 4.5
Other 9.1
If no, are you considering creating such a function?
Yes 13.60%
No 86.4
In the past 12 months, several companies have had problems with earnings shortfalls and restatements. Do you think a crisis management function would have helped them?
Yes, the news could have been handled more smoothly by specialists 28.60%
No, as the CFO, I should handle it 71.4
No, the public relations department should handle it 0
Who decides whether financial results are to be restated?
The external auditor 28.60%
The CFO 35.7
The CEO 9.5
The board 26.2
How is a restatement disclosed? (Check all that apply.)
A filing to the Securities and Exchange Commission 70.60%
A press release 50
A press conference 5.9
A conference call, available only to analysts 2.9
A conference call, available only to analysts and the press 2.9
A conference call, available to analysts, the press and investors 44.1
An analysts’ meeting conducted by the CFO 2.9
An analysts’ meeting conducted by the CEO 8.8
A Webcast 20.6
