Five Things You Should Read

December 2, 2019

Footnotes At The Forefront, Private Equity On Buyout Sidelines and Say No Nicely to the Recruiter

Companies Burying the Lede In Footnotes

Institutional Investor

Harvard Business School and MIT’s Sloan School of Management claim to have found the first empirical evidence that public companies are using information buried in footnotes to manipulate earnings. The research found that public companies frequently disclose non-operating income-statement items and that those adjustments significantly altered the true nature of the economics of the business and that these adjustments are increasing over time.

The Difference Between Innovation Makers and Fakers

Harvard Business Review

Some companies practice “innovation theater” by taking part in hackathons and investing in startups with little impact. Others, however, yield a stream of internal improvements; new products and services; experiments with different business models; and investments in fledgling companies that are connecting with new customer segments. Some of the key attributes of an effective innovation program include focusing on specific problems, designing proper incentives and monitoring results.

Private Equity Isn’t Buying What You Are Selling

Wall Street Journal

Companies looking for a private equity buyout may be waiting a long time. The aggregate value of U.S. buyouts fell 25% year to date through October, compared with the same period a year earlier, according to data provider Preqin. Deals totaled $155.2 billion during the first 10 months of the year—the lowest since 2014. Meanwhile, public company acquirers whose stock prices have run up this year and use their shares as a deal currency has an edge over financial buyers in most auction processes.

How to Say Thanks, But No Thanks to a Recruiter

The Ladders

When a recruiter says a company wants to meet your response becomes a judgment call. If you decide to take a pass you are then tasked with the responsibility to professionally decline an interview. Many people find this conversation a tricky one since it’s essential to be honest while also keeping the lines of communication open. But most importantly, you don’t want to burn a bridge.

A UK Accounting Difference Without a Distinction

IPE

UK proxy firm Pensions & Investment Research Consultants (PIRC) has written to all FTSE 100 companies warning them to watch out for any discrepancies between the assets reported in their group accounts and those in their parent or holding company accounts. At the core of this debate is an important legal and financial distinction: group accounts are not the same thing as parent entity accounts. PIRC added that confusion around the accounting issue lead the recent collapse of two UK public companies: Thomas Cook and Carillion.