Thursday, December 8, 2011

What are the advantages/disadvantages exposing company financial information to general employee population?

In the past, most employees did not have access to their employer's financial statements via the website in terms of a publicly traded company. Due to SEC's Regulations, publicly traded firms are required to report their financial statements on a quarterly basis. At times, things could be misinterpreted and rumors will begin to surface in regards to the organization's financial stability.|||One reason a company may be reluctant to disclose their earnings is when the company has an employee union. This puts the company at a definite disadvantage if the union is aware of the true financial picture during contract negotiations.





The other reason is that most companies are "old school" and don't consider that employees need to know this information. What they don't realize is that if an employee is trained to understand the financial picture and the company shows them how they can contribute to the bottom line, the employees are more willing to help the company, especially if the employees see where it can benefit them.|||If the company is publishing its financial statements with the SEC, the by definition all the information in them is public. most companies' information is easily available on line because they file their results in the EDGAR system (electronic data gathering and retrieval system).

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