Buzzwords – Equity victimhood

Let’s say you’re a finance director. And you’re having night terrors.

In just a few days you’ll be publishing the annual results and, well, the analysts just aren’t going to consider you king of finance when they see the numbers.

But that’s not the reason for the after-dark anxiety attacks. Nor is the dressing down you can expect from the chairman of the board and the chairman of the audit committee. If the furore’s really bad, you can resign and hunt for a new job, pocketing your two-year’s salary, share options and pension as you go.

No, the thing that really gets your bowel moving is ‘equity victimhood’.

This is the unshakeable belief of the shareholder that, should shares take a nosedive, someone has to pay. And pay big. It could be government (like demands after the catastrophe at Railtrack) or it could be the auditor (Andersen after Enron).

On the other hand, it could be the company directors. The fact is that shareholders, whether institutional giants or smallholder minnows, believe less and less that the market is to blame. They want certainty. They see business as a science and, as long as you know enough and are vigilant, you are guaranteed to make money. If not, they want someone – anyone – to shoulder the burden.

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