How much information do you give to investors?

CEO's have a right to be paranoid about giving away too much information. Sometimes, innocent recipients prove to be anything but. Former employees with stock from exercised stock options, and who have moved on to competitors, are one example. And how about the investor with a financial or family interest in a competitor - and little scruples to prevent sharing unfiltered information?

This week, we examine the question of rights versus right - of good relations with investors versus recklessness. There are some great (but not happy) stories of CEO's who have opened the door to the competition inadvertently by attempting to be responsive to "simple" shareholder requests. So what is the minimum required? And how do you walk that line? Read on...

All the best,

How much information do you give to investors?

There is a natural fear of giving too much information to investors after the initial investment is received. CEO’s worry that investors will not keep the information confidential and that financial data will find its way into competitors’ hands. Others worry that investors will latch onto individual line items within financial data and engage in inquisitions regarding telephone bills, marketing costs and other tactical line items in detailed financial statements.

First, let’s cover the absolute minimum legal requirement a company has to provide to its investors. There must be an annual meeting of the shareholders, and that meeting must be announced with a written notice at least twenty days prior to the meeting. (There is a provision that a waiver of notice may be signed preventing this need, but it requires that all shareholders sign).

At the annual meeting (which can be attended by phone)... To read the rest of this insight, click HERE to go to the full posting in the blog at http://berkonomics.com.

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