I’ve been listening to the various financial reports from the major phone companies this week.
Am I the only one who is tired of these boilerplate ‘Safe Harbour’ notices at the beginning of almost every CEO / CFO presentation? On the screen for 2 seconds and then moving on.
I think we all understand the origins. I am sure that we can thank the same litigious law firms that led to McDonald’s putting a warning on their coffee cups saying ‘Contents may be hot’.
I love the phrasing in these Safe Harbour slides:
The presentation and answers to questions today contain forward-looking statements that require assumptions about expected future events including competition, financing, financial and operating results, and guidance that are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate so do not place undue reliance on them.
Translation into plain language? While we want you to listen to this, and pump up our stock price, don’t even think about holding us accountable. What is undue reliance? Is it reasonable to place any reliance on these statements? The message I took from Mark Cuban’s blog is that shareholders need to be more activist. Like reminding companies about who owns who. If shareholders are the owners, shouldn’t management be willing to stand behind the statements they are making?
Why doesn’t the McDonald’s coffee cup say ‘Warning: Contents are hot’? Because then lawyers would file suit in case the coffee ever cooled down. Commitment, folks. Where is the commitment?
Companies: Stop trying to cover your assets so broadly that your warnings are like labels on jars of trail mix, warning ‘May contain nuts’.
The jar better contain nuts – otherwise you’ll be hearing from my lawyer!