Interim report by the Board of Management sent out by stock corporations to shareholders (and the business press), usually on a quarterly or semi-annual basis. According to critical evaluations (worldwide!The majority of the communications, following critical evaluations (worldwide!) of letters sent out, proceed as follows: – Presentation of adverse circumstances within the reporting period, – Assertion that the changed market conditions are regarded as a challenge, – Presentation of an action program (usual components: organizational adjustment, cost reduction, personnel restructuring, portfolio streamlining, shift of focus to core competencies and similar), – emphasis that the company feels well prepared to compete, – praise of the employees, – thanks to the shareholders, – promise of better results, – request to continue to be patient and to remain loyal to the company, and – concluding assurance that things would soon be looking up. – Up to now, it has proved very difficult to take legal action against recognizably partially true (factoidal) and embellished (beautified) statements in a shareholder letter. This is because the courts regard the letter to shareholders as a non-binding assessment (non-committal estimate) of the business situation by the management board. Therefore, the credibility of a letter to shareholders should not be subject to too strict standards. The same attitude was also taken by supervisory authorities with regard to corresponding action letters from financial service providers. – See shareholder, active, disclosures, inaccurate, disclosures, veiled, information delay, information overload, public disclosure, publicity, situational, salami tactics, sales figures, false, disclosure, immediate, circumstances, valuation, predictions.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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