Gimme some truth | This Week in Business
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We are constantly being lied to by the companies in this industry, and every other.
Well, maybe "lied to" is a bit strong, but we're constantly being given an incomplete picture, one that his been smeared with Vaseline to cover up wrinkles and digitally altered to really make those rose-colored highlights pop.
Every corporate communication we digest has been passed through the equivalent of a FaceApp filter several times before it gets to us, whether that's through advertising, press releases, or even interviews.
Thankfully, corporations don't send all their communication through those venues. For example, publicly traded companies also release annual reports to investors and regulators.
These reports can be lengthy documents densely packed with minutia about the business, and because companies tend to be careful about ticking off the money men and the government, annual reports don't emphasize spin quite as much as your standard company spokesperson.
It's not all brutal honesty, of course. After all, the company is making the case for why its current strategy is the one that will lead to a brighter future and greater growth, no matter what the current state of things is. But there's one part of an annual report where that kind of optimism is all but absent, and that's the "Risk Factors" section.
Risk Factors are sort of the Murphy's Law of corporate communications. Companies identify an extensive list of things that can go wrong, and they spell them all out for investors so even someone without in-depth knowledge about their specific industry could understand the myriad ways the business could go south, whether it's the company's fault or
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