10 Apr Corporate Communication and Investor Relations
As discussed with the support team, please finish work within 9 days (07-Feb-2020). Thanks very much.
Warren Buffett is the CEO and Chairman of the Board of Berkshire Hathaway.
Please view a short video of him via the link below.
https://www.youtube.com/watch?v=7X3ETQX18nk#action=share
1) Having watched the video, please summarise Warren Buffett’s view on how to communicate with shareholders.
2) Do you agree or disagree with Warren Buffett’s view on how to communicate with shareholders? Why?
3) Discuss the advantages and disadvantages of this kind of communication with shareholders.
4) Do you think this type of communication would be suitable for all publicly listed companies? Describe the kinds of companies (or the conditions under which) you would / would not recommend this kind of shareholder communication. Explain your reasoning.
In developing your arguments, please also consider the financial communication structure and frictions that you expect to be relevant.
In addition to other resources you may choose to use (e.g. Berkshire Hathaway website), you may find Thomson One database, Bloomberg or factset, useful in preparing your response.
I added an example case on Pixar. The answers on the slides (Session3&4) are based on it. But please answer the questions based on the video. It would be great if you could use data too. Please let me know if something is not clear.
These sources can be used, too:
– Cotter, J., I. Tuna, P. Wysocki, 2006. Expectations management and beatable targets: How do analysts react to explicit earnings guidance? Contemporary Accounting Research, Vol. 23, Issue 3, pp. 593-624. (Links to an external site.)
– Ng, J., I. Tuna, and R. Verdi, 2013. Management forecast credibility and underreaction to news. Review of Accounting Studies, Vol 18, Issue 4, pp-956-986.
– Any other source which can be relevant is more than welcome.
