Kate O'Sullivan, CFO.com | US
July 30, 2009

Not too surprising

There has been a growing cynicism and distrust for both our elected officials and many publicly traded companies. The effects of this cynicism is visible in both voter turnout as well as anecdotal evidence of the corruption within the "system." Candor and transparency, regardless of the issues, are becoming more respected and consequently develop a more trusting relationship with voters and stakeholders alike. Those who are willing to share both good news as well as bad news in a timely manner are those who gain more and lose less in both bull and bear markets. Why should we be surprised? Is it so uncommon that these relationships are built on trust? Apparently yes, but I believe the tide is changing, evidenced by many companies opening communication lines and even partnering with NGOs and advocacy groups.

Posted by Martin Jennings | Aug 5, 2009 7:55 AM ET

How surprising !!!!!

The conclusions of this study should not be misinterpreted. Providing early warning to the market will result in an early reaction !!! and therefore ... a limited reaction when the information is released. It is not possible to conclude that "Companies that provided early warnings when they expected to miss an estimate enjoyed better returns than those that failed to announce an earnings miss beforehand". One has to consider the entire impact of a bad news on the share price and not only part of it !

Posted by jeanflorent rerolle | Aug 3, 2009 3:18 AM ET