SLAMMED!

摘要

Corporate America is finally getting the message: Financial reporting that is technically correct but does not clearly reflect a company's operating health is no longer acceptable. In the wake of criticism about how it booked the gain on the sale of one of its businesses, IBM announced on Feb. 19 that it would expand the information it provides investors on such things as its intellectual-property income and the impact on earnings of the company's overfunded pension plan. And a day later, General Electric Co. Chairman and Chief Executive Jeffrey R. Im-melt also heeded investors' calls for better disclosure by promising to provide more detail on how the company's individual units―including its finance arm, GE Capital―churn out their earnings. Expect this lifting of the veil to spread rapidly throughout Corporate America. In the wake of Enron's collapse and questionable accounting at telecommunications companies such as Global Crossing Ltd., investors are demanding better, more frequent, and more expansive information about companies' financial health. This rising pressure will force executives in boardrooms across the country to wrestle with exactly how much new information to reveal, much less the question of how to flag changes for investors without causing their stocks to tank. "GE and IBM are bellwethers," says Patrick S. McGurn, vice-president at proxy advisory service Institutional Shareholder Services Inc. "You will see a huge wave of imitation."