Search
 

Taking the long-term view

Most CFOs want to abolish quarterly guidance pronouncements, according to a recent survey. That's not surprising since most companies can't even get their annual in-house forecasts right.

By Staff Writer | Updated on February 05, 2008

Most CFOs want to scrap quarterly guidance pronouncements, according to a recent survey by Financial Executives International (FEI) and Baruch College’s Zicklin School of Business. An overwhelming majority (81%) believe that this practice monopolizes management’s time and takes it away from more value-added strategizing and other, more critical responsibilities. Ultimately, CFOs and other financial experts argue that the practice plays into the hands of hedge funds and private equity firms by bringing unnecessary volatility to share prices and corporate market capitalizations.

It also puts CFOs on the hot seat. A company that fails to manage market expectations to the penny risks watching its share price pummeled for the slightest discrepancy–sometimes either way. Too often CFOs have been the fall guy, being sometimes forced to resign over a miss. “We’ve seen companies–and their CFOs–taking severe hits in the past few years after missing forecasts,” says Fritz Roemer, who heads up the enterprise performance management executive advisory program at benchmarking consultants The Hackett Group. “Stock prices become unstable and valuations drop dramatically.”

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2024 ALM Global, LLC. All Rights Reserved.