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Wednesday, May 03, 2006

Survey Shows Alarming Drop in CEO Transparency Since Enron Bankruptcy

CEO transparency in shareholder letters, a key indicator of CEO integrity, has substantially declined since the Enron bankruptcy and the passage of Sarbanes-Oxley legislation, according to an annual survey of investor communications. The 2005 Rittenhouse Candor Rankings(SM) survey found an increasing number of companies use more jargon, spin more information and make more confusing statements in shareholder letters than before the exposure of widespread corporate fraud in 2002.

L.J. Rittenhouse, President of andBEYOND Communications said, "The passage of Sarbanes-Oxley legislation in 2002 was intended to promote clear and transparent disclosure, but only 24 percent of the companies in our 2005 survey were awarded top marks in candor down from 57 percent in the 2002 survey. While many executives are certifying their results to comply with Sarbanes-Oxley, they are also publishing virtually unintelligible shareholder letters. If they cannot candidly articulate their goals and results, then how can they credibly walk their talk?"

posted by Brian Moran @ 10:44 AM   0 comments

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