Best Practices for Issuing Financial and Non-Financial Guidance

For IR professionals, providing what most commonly is referred to as "earnings guidance" is a core concern. Guidance practices trend data related to both financial and non-financial guidance, frequency of guidance, and periodicity of guidance are provided to assist members in benchmarking against current practices. 

In June 2018, NIRI released an updated policy statement on guidance practices. Additional resources, including statements by the Business Roundtable and other organizations, on this topic are available here.   

NIRI Guidance Practices Research 

NIRI guidance surveys typically inquire about practices and preferences related to company guidance policy. The survey instruments are generally divided into one section on financial guidance (i.e. all quantitative economic measures of a company’s performance including earnings or EPS, revenue, cash flow, EBITDA, operating income, gross margin, expenses, CAPEX, tax rate, etc.), and another section on non-financial guidance (i.e. any information about current broad-market or business conditions that have the potential to impact company performance and are not typically reflected in a company’s financial statements). Additionally, the surveys inquire about the frequency of guidance (i.e. how often guidance is communicated and reiterated or updated) and the periodicity of guidance (i.e. the timeframe on which the company is providing forward looking statements, typically in the form of quarterly or annual estimates).

NIRI's last five guidance practices studies include:

• NIRI Earnings Process Practices Study (2016)
• NIRI Guidance Practices Study (2014)
• NIRI Guidance Practices and Preferences Survey Report (2012)
• Public Company Forward Looking Guidance Practices (2010)
• NIRI and CFA Institute Results of Joint Study on Guidance Practices and Preferences (2008)