A politician once said, “A billion here, a billion there; pretty soon it adds up to real money.” Attributed to Sen. Everett Dirksen.
Well, tell that to the former CFO and the former pharmacy chief at Walgreen’s. A billion dollar difference in earnings estimates between the April forecast and the July forecast led to their departure.
“$1 Billion Blunder Trips Up Walgreen,” Wall Street Journal, August 20, 2014 A1 Apparently due to a flawed forecast of the cost of prescriptions under Medicare Part D.
I don’t believe the first shareholder suits have been filed yet, but I suspect the D&O insurance carrier has been notified.
Does your company have control systems that would prevent such a “blunder”? Is it worth (or a part of) your job to check? If you’re a director, are you liable, or at least responsible? Is this an information governance issue, or something else?
