The Market Fortress Papers, No. 5. The Sentinel

Knowing what must be reported before the deadline does.

Most disclosure failures were never decisions. Nobody chose to withhold anything. The event simply was not recognized as an event. A contract is signed, a director resigns, a lender calls, a payment is missed, and each enters the organization as ordinary business rather than as a disclosure question. A company can possess the information it needs and still fail to recognize what it is holding, and by the time someone realizes what happened it is no longer evaluating a current event but reconstructing one. This paper is about closing the distance between the moment an event happens and the moment the company understands that it did. The Sentinel does not decide what is material, a judgment that belongs to management and its professional advisers. It makes sure the question reaches the people responsible for answering it, so that nothing potentially material passes unexamined.