Should Google Have Warned Shareholders?
Google blamed a higher than expected tax rate for the reason it missed expected earnings, raising the question of whether they should have warned investors. That’s exactly what The Age asks…
In the age of Sarbanes-Oxley, which aims to get more and better information to investors quickly, unexpected earnings misses create a dilemma for companies: If they know revenue or profit is going to come up short, are they obligated to disclose it in the course of a quarter?
“The senior management team should disclose that to the board,” said Craig Dunn, executive director of the Corporate Governance Institute at San Diego State University, when asked about the Google quarterly results. “The board, then, I think has a duty to report that to investors, whom they represent.”