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I'm well aware of Enron Oil and Arthur Andersen. It was a...

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StefanF

5,518 Posts.

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17/12/18

10:24

Post #: 36878891
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Originally posted by wiskers ↑

Originally posted by StefanF
I work in an ASX 100 company and while I can only speak for this highly regulated company, it is almost impossible to spin and hide things from shareholders. You have the financials of the company that are set in stone, you have the investor relations team that draw up the report and you have the executives review and sign off only. The directors aren't involved in the process since they are part of the board, not the actual business. Additionally, you have investor road shows where analysts grill the C-suite about any discrepancies or things that don't make sense. And finally you have the big audit firms that put their neck on the line to make sure all the financials add up. Therefore I have to disagree with your statement that the annual reports are marketed to keep the directors wealth up. Also keep in mind that these days the majority of bonuses are long term incentives, which means its in the executives best interest to have the business running well overall and into the foreseeable future. Your first statement is correct, a lot of effort is put into aligning shareholders and executives interests.
A good read is Enron Oil/ Arthur Andersen.

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I'm well aware of Enron Oil and Arthur Andersen. It was a catalyst for a lot of the points I covered earlier.

APT Price at posting: $12.09 Sentiment: Hold Disclosure: Held
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