In its report Full Disclosure 2000, management consulting and research firm Shelley Taytor & Associates found that old economy companies may be better at voluntary disclosure than their new economy counterparts - but that neither are giving investors what they want. In the review of annual reports, publisher Shelley Taylor said that more than three times as many old economy companies reported on cash flow and almost three times as many disclosed bad news.
Although investors value annual reports over all other corporate documentation, many left out valuable information. For example, strategy ranked in the top ten of investor information needs in 1996 and 1998, yet only qo~ percent of the new economy companies (compared to 6a% of global looo old economy companies) surveyed discussed it in their annual reports.
Taylor warns: "Companies that fail to communicate concrete strategies and tactics for the future seriously jeopardise investor confidence, future financial performance and, ultimately, share price." Both old and new companies have much to learn. Recent start-ups are better at talking about their business activities, but must learn the lessons that have been hardearned by their older and wiser peers. Mature companies also have important lessons to learn from their entrepreneurial and experimental cousins, the start-ups of the last fiw years.
Published every two years since 1992 Full Disclosure 2000, an international study of company reporting, contrasts the disclosure practices of new economy companies (those that have gone public in the last five years) with old economy companies (drawn primarily from the global 1000). The sample includes companies from the US, UK, France, Germany, Scandinavia and others.