Oops. With several more zeros.

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?

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Filed under Board, Collect, Controls, Duty of Care, Governance, Inform market, Inform shareholders, Internal controls, Investor relations, Management, Oversight, Risk, Value

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