FINCON: CHAPTER 8

Controller

An information resource or source for any financial data, for those officers and executives who need it for IR purposes

Controller

Financial statements reflecting actual results and/or condition of the entity and/or any segments, such as

(i) Statement of income and expense

(ii) Statement of cash flows

(iii) Statement of financial condition

Controller

Relevant financial analyses of actual data and trends of these statements, as required for IR purposes, such as

(i) Inventories

(ii) Accounts receivable

(iii) Long-term debt, by category of debt

(iv) Plant and equipment, by location

(v) Relevant ratios, including comparisons with industry and competitors

(vi) Detail and type of revenue and expenses by appropriate segment

Controller

Financial statements and analyses of planned/forecasted results (annual and long-range plans) for the company and segments—available but often not disclosed to analysts.

Controller

Graphs and tables showing financial trends (actual and projected). All financial data, whether external or internal, must be prepared under the controller’s supervision, with CFO/CEO oversight.

Controller

Interprets financial data for IR audiences (analysts, investors, financial sources, bank loan officers) when requested by executives.

Controller

Communicates financial information to entitled individuals/groups under IR rules—includes presentations and Q&A.

Controller

Prepares or reviews financial commentary in reports (annual, quarterly, 10-K, 10-Q, etc.) for accuracy and completeness.

Controller

Reviews financial/accounting content in news releases, special announcements, and IR publications.

Provides recommendations to CFO or makes final decisions if authorized.

CFO

Principal communicator of financial policy, status, and trends to major groups (security analysts, brokerage houses, large investors).

CFO

Principal spokesperson/negotiator for raising capital (equity or debt), working with investment bankers, commercial banks, and institutions, with CEO/Board approval.

CFO

Reviews major financial publications (annual/quarterly reports, news releases) with input from the controller for accuracy, completeness, and disclosure.

CFO

If IR is part of finance, directs its activities, sets disclosure policies, and builds a professional IR team for functions not handled by the CEO, controller, or himself.

CEO

Preside over major meetings with security analysts, large investors, and the like and present the background and related information on such important matters as:

(a) Company mission, purpose, goals and objectives, and so forth

(b) Competitive position of the company

(c) Major operating accomplishments in recent periods

(d) Direction company is headed

(e) Any forthcoming major events that can be announced (management changes, acquisitions, divestments, etc.)

CEO

Meet, on a one-to-one basis or with a few individuals only, any major investor, opinion maker, banker, and so on, who wishes to see her. Discuss major points as in item 1 above.

CEO

As appropriate in IR meetings, refer financial questions to the vice president of finance or controller, and certain operating questions to the operating executive present.

CEO

As to important financing matters, meet with other major players, as deemed proper: commercial bankers, investment bankers, rating agencies, institutional investors, and so on. She should lend support to the proposed transactions, provide relevant background about the company, and answer questions directed to her.

CEO

Ascertain that the messages in any important public statements (e.g., the annual report, quarterly financial reports, financial-type news releases) are as she thinks they should be, or understand why not.

CEO

Address important company matters and the annual meeting of shareholders.