VIII Lisbon Debate Comunicação Rita maltez

1. VIII Lisbon Debate Comunicação Rita maltez Lisboa, Novembro de 2011 What are you talking about? Financial information RITA MALTEZ Pares Advogados rm@paresadvogados.com

2. 2 About ten years ago, I was looking to invest in Enron. Their prospectus was so thick that I looked at it for about five minutes and I threw it in the garbage can. I wasn’t patient enough to read it and I wasn’t being paid to read it. I did wind up investing, though, and about six months later the company collapsed. Jim Kaplan, CEO Integrity, GMI Blog, May 03, 2011 2 About ten years ago, I was looking to invest in Enron. Their prospectus was so thick that I looked at it for about five minutes and I threw it in the garbage can. I wasn’t patient enough to read it and I wasn’t being paid to read it. I did wind up investing, though, and about six months later the company collapsed. Jim Kaplan, CEO Integrity, GMI Blog, May 03, 2011

3. It's not impossible to uncover what a company is hiding with clever accounting tricks--but it's pretty darn tough. Often, balance sheet shenanigans that would send investors for the exits are discovered only after a company's already facing serious consequences in the guise of regulatory problems, class action litigation, a plunging stock price or outright bankruptcy. Forbes, The Risk List Revisited 06.10.2010. 2 It's not impossible to uncover what a company is hiding with clever accounting tricks--but it's pretty darn tough. Often, balance sheet shenanigans that would send investors for the exits are discovered only after a company's already facing serious consequences in the guise of regulatory problems, class action litigation, a plunging stock price or outright bankruptcy. Forbes, The Risk List Revisited 06.10.2010. 2

4. We find that answers of deceptive executives have more references to general knowledge, fewer non-extreme positive emotions, and fewer references to shareholders value and value creation. In addition, deceptive CEOs use significantly fewer self-references, more third person plural and impersonal pronouns, more extreme positive emotions, fewer extreme negative emotions, and fewer certainty and hesitation words. Detecting Deceptive Discussions in Conference Calls David F. Larckery Anastasia A. Zakolyukinaz July 29, 2010 2 We find that answers of deceptive executives have more references to general knowledge, fewer non-extreme positive emotions, and fewer references to shareholders value and value creation. In addition, deceptive CEOs use significantly fewer self-references, more third person plural and impersonal pronouns, more extreme positive emotions, fewer extreme negative emotions, and fewer certainty and hesitation words. Detecting Deceptive Discussions in Conference Calls David F. Larckery Anastasia A. Zakolyukinaz July 29, 2010 2

5. CFOs are involved in material accounting manipulations because they succumb to pressure from CEOs, rather than because they seek immediate personal financial benefit from their equity incentives. Why do CFOs Become Involved in Material Accounting Manipulations? 2 CFOs are involved in material accounting manipulations because they succumb to pressure from CEOs, rather than because they seek immediate personal financial benefit from their equity incentives. Why do CFOs Become Involved in Material Accounting Manipulations? 2

6. Letter addressed to Berkshire Hathaway Inc’s shareholders by Warren Buffet: From the questions submitted, each journalist will choose the dozen or so he or she decides are the most interesting and important. The journalists have told me your question has the best chance of being selected if you keep it concise, avoid sending it in at the last moment, make it Berkshire-related and include no more than two questions in any email you send them. (…) Neither Charlie nor I will get so much as a clue about the questions to be asked. We know the journalists will pick some tough ones, and that’s the way we like it. (…) Our goal, which we pursue both through these annual letters and by our meeting discussions, is to give you a better understanding of the business that you own.” Link: Berkshire Hathaway, inc 2 Letter addressed to Berkshire Hathaway Inc’s shareholders by Warren Buffet: From the questions submitted, each journalist will choose the dozen or so he or she decides are the most interesting and important. The journalists have told me your question has the best chance of being selected if you keep it concise, avoid sending it in at the last moment, make it Berkshire-related and include no more than two questions in any email you send them. (…) Neither Charlie nor I will get so much as a clue about the questions to be asked. We know the journalists will pick some tough ones, and that’s the way we like it. (…) Our goal, which we pursue both through these annual letters and by our meeting discussions, is to give you a better understanding of the business that you own.” Link: Berkshire Hathaway, inc 2

7. “This consultation paper proposes a new, simpler framework for narrative reporting that will reduce burdens on companies that are currently producing large, complex reports that lie unread by investors. We will remove outdated disclosure requirements that are of no use to investors or other stakeholders, and we will give companies the clarity that they need to produce clear, useful reports for investors.” Department for Business and Inovation Skills, Sep 2010 2 “This consultation paper proposes a new, simpler framework for narrative reporting that will reduce burdens on companies that are currently producing large, complex reports that lie unread by investors. We will remove outdated disclosure requirements that are of no use to investors or other stakeholders, and we will give companies the clarity that they need to produce clear, useful reports for investors.” Department for Business and Inovation Skills, Sep 2010 2

8. Shareholder’s right to information in Portuguese Companie’s Code: 2 Shareholder’s right to information in Portuguese Companie’s Code: 2

9. Shareholder’s right to information on Portuguese Companie’s Code: 2 Shareholder’s right to information on Portuguese Companie’s Code: 2

10. . Market’s right to information on Portuguese Securities Code Quality of information 1. Information relating to financial instruments, organized forms of trading, financial intermediation activities, clearing and settling of transactions, public offers of securities and issuers, should be comprehensive, true, current, clear, objective and lawful. 2

11. . 2 Market’s right to information in Portuguese Securities Code

12. . 2 Market’s right to information on Portuguese Securities Code Audited information 1. Annual financial information contained in the accounts or prospectuses must be the subject of a report prepared by an auditor registered with the CMVM, where such accounts or prospectuses: a) Should be submitted to the CMVM; b) Should be published in relation to a request for admission to trade on a regulated market; or c) Complies with collective investment undertakings. 2. If the documents referred to in the preceding number include business plans or forecasts on the economic and financial situation of the respective entity, the report of the auditor should clearly refer to the respective assumptions, criteria and consistency. 3. In the event of interim information or any quarterly or half-yearly financial information having been submitted to an audit or limited review, the audit or review report should be included, failing which same should be stated.

13. . Consultation Paper No. 1/2011 The CMVM (Comissão do Mercado de Valores Mobiliários) has placed a paper on the Draft Understanding that aims to improve the quality of disclosure by issuers as regards summary financial information pursuant to Article 7 of the Securities Code. 2

14. . Privatizações 2

15. . Privatizações ‘O modelo escolhido para as privatizações é completamente discricionário. Não implica concursos, consultas abertas ao mercado, nada que possa ser escrutinado pelos concorrentes e pelos portugueses. O governo vai decidir por si, por razões que só ele define e avalia, e não tem contas a prestar a ninguém. Considerações como os “interesses estratégicos” são outra maneira de acentuar a discricionariedade com grandes palavras, cuja vacuidade pode servir para tudo. Isto é um absurdo, está diante dos nossos olhos, e passa incólume pela indiferença geral. Pior ainda, o primeiro-ministro revela preferências em público, no caso da EDP, pelos brasileiros, ainda nem sequer está definida uma qualquer short list de concorrentes às privatizações. Acresce que a privatização da EDP parece ser uma das mais apetecíveis e que mais concorrência suscita entre grandes grupos estrangeiros.’ José Pacheco Pereira, Revista Sábado 2

16. . Privatizações “O PS vai apresentar propostas na especialidade para introduzir maior transparência nos processos de privatização definidos pela ‘troika' e pelo Governo e contesta a forma como está a decorrer a venda dos 20% do capital que o Estado detém na EDP. Este é o único processo que já está em curso. O Diário Económico sabe que a falta de informação por parte do Governo sobre o processo de privatização da eléctrica nacional está a causar indignação no Largo do Rato e Seguro já fez saber aos seus mais próximos colaboradores que o País e o maior partido da oposição deviam ter conhecimento da forma como estão a decorrer as negociações com os candidatos. Não só em relação ao projecto industrial da EDP e ‘governance' da empresa, mas também outro tipo de contrapartidas que estejam a ser equacionadas para a economia nacional.” Diário Económico, 8 Novembro 2011 2

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