Competitive intelligence = business intelligence. It may be hard to concede that we can actually learn quite a lot from our competitors because they might be doing something better than us.
The competitive instinct is to consistently one-up, to maintain a mental threshold of, “We’re better than they are.” But being better than they are doesn’t have to be a process of reinventing the wheel, nor does it mean that because they’ve done it, we can’t do it too.
It’s been said that good work is never a spontaneous conception – it is always the culmination of existing ideas and building on top of them. It’s this very idea that we must apply to disclosure.
Good disclosure – also known as smart disclosure – is never the product of a single reporting manager’s mind. It’s the coming together of research, precedents and benchmarks that serve to create a holistic understanding of an industry, a practice and a profession.
Here are three things your competitors can teach you about disclosure – and how you can them improve your own financial reports.
The FASB or IASB publishes an update to a standard – your competitor may have already disclosed. This presents a prime opportunity for you to borrow the already formatted disclosure, adapt it for your own purposes and even improve it.
Narrative phrasing for rare note disclosures
While you may be a numbers person, your investor might not be. If you’re looking to contextualize a rare note disclosure, looking through your competitor’s disclosure archives for a similar instance would be beneficial to your own phrasing. Data is only half the story – it’s the facts. The narrative colors the facts and thus, is the key knowledge your investors need.
You’ll no longer have to come up with a strategy on your own. Looking at competitors’ filings for precedents can help you 1) come up with an action plan and 2) illustrate to management a variety of scenarios. For example: company A had a bad explosion in 2010, and company B just had a similar one. How did company A write their news release? Was their response taken well? Look to your competitors to tell you how – or how not – to respond.
If you’re ready to reap the benefits of leveraging smart disclosures that have preceded yours, start your free 30-day free trial of DisclosureNet today!