The Rittenhouse Rankings: Cut through Financial Reporting's FOG

“Numbers report results but words reveal the integrity of leadership and the corporate culture.” 

-L.J. Rittenhouse


Accountants tend to be more interested in financial statements and footnotes than the CEO letter which accompanies the financial statements.  We like quantifiable facts and data.  Management’s discussion of results, on the other hand, is “squishy,” intangible and, arguably, not measurable.  In this seminar we will learn how to analyze management’s discussion of results to predict the organization’s long-term success or failure. 

Laura Rittenhouse developed a methodology called Rittenhouse Rankings in which she reviews all shareholder correspondence and annual reports from 100 companies.  She looks for the difference between candor and quantifiable objectives in this correspondence vs. FOG, Fact-deficient, Obfuscating Generalities such as clichés, jargon, hyperbole and weasel words.  The result is a “candor score” for each of the 100 company reports she analyzes annually.  She then correlates the candor scores with share performance.  Her methodology predicted the collapse of both Enron and the fall of Lehman Brothers.  Trust is the foundation for long-term business success.  Candor is the language of leaders who choose to be trusted.



*Provide background and foundation for participants regarding the importance of candor as a predictor of future business success.

*Introduce Rittenhouse Rankings as a way to measure executive candor.

*Gain an understanding that candor can be quantified and executive’s words do matter!


*Candor:  What it is, why it is significant and the importance of the “tone at the top” to create an ethical work environment.

*Risk:  How to define risk and why a profound understanding of risk is important to long-term business success.

*Culture Gone Awry – Mistakes and Mishaps:  How the wrong corporate culture can prevent employees from understanding their organization’s business model and distorts the difference between right and wrong using two cases as examples?the Veterans Administration scandal and the ignition key fiasco at General Motors.

*Quantifying Candor:  Discussion of the Rittenhouse Rankings methodology as a way to measure executive candor and how candor correlates with market performance, revealing leadership integrity, alignment with corporate culture and investor confidence.  Measuring corporate candor is a way to predict future market performance and excessive risk taking. 

Additional Information

Designed For

CFOs, those who aspire to be CFOs and internal and external auditors



Advanced Preparation



Experience reading or composing management's discussion of operations

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