NIRI says the elephant in the room needs an enormous carrot

Issuers are mired in stly reporting changes, from the phase-in of XBRL-tagged GAAP statements to new proxy disclosures. When financial intermediaries met on Thursday to promote XBRL for rporate actions, NIRI CEO Jeff Man responded frankly: issuers will need a darn good reason to get on board.

Today XBRL US issued a press release affirming the need to cate issuers and involve them in applying XBRL to rporate actions.

‘This is such a love-fest!’ Man burst out last week after listening to DT and the Association of Global Custodians push XBRL for rporate actions like mergers, tenders or dividends. ‘And it seems like there’s a big elephant running around the room.’

Man was on the keynote panel at rporate Actions 2009, put on in New York by XBRL US and Securities Operation Forum. He exposed the lack of interest in changing rporate actions announcements.

‘I’m here representing issuers, representing the elephant in the room – a group that knows little about this movement and is frankly not very inclined or does not feel incentivized to have to standardize the issuing of rporation action releases,’ Man said.

‘This is not on the issuer radar screen at all, at any level, and there are several levels: the attorneys, investor relations, mmunications, the rporate secretary – a host of places this intersects at the issuer side,’ Man later added. ‘It makes a lot of sense, but that doesn’t mean the issuers are going to jump on board and say, Yeah, let’s spend more money to do this.’

Don Donahue, chairman and CEO of DT, acknowledged the need to ‘initiate a dialogue’ and mmunicate ‘the value proposition’ to the issuer mmunity.

‘Part of this has to be making clear that we have been masking an enormous amount of problems that the issuer mmunity has been unaware of,’ Donahue said.

Any one of the 5.8 mn unique rporate action events processed by DT in 2008 risked beming a horror story because of inaurate or inmplete reporting, Donahue said. He estimated the processing losses on rporate action worldwide at $400 mn to $900 mn a year.

‘Obviously the risk in this business is very high and rcing it should be a priority, ’ Donahue said. ‘We have the opportunity to bring clarity, nciseness and nsensus to the often murky and unnecessarily risky business of processing rporate actions.’

Man said he understood the benefits of transparency ming from using XBRL for rporate actions. But issuers don’t get it – yet: ‘We have to deal with what’s mandated first. Now you’re talking about a voluntary type of thing. It is not on our radar screen and the carrot would have to be enormous.’

XBRL US has posted a webcast rerding of Man’s keynote panel as well as a white paper about rporate actions: http://xbrl.us/events/Pages/rpact2009.aspx.