But quarterly guidance — which only 28 percent of companies offered in 2016 — is only part of the problem. The bigger problem for boards and CEOs is a fear of rattling a company's stock price.
"This price decline we believe CEOs are terrified of ... they find that embarrassing ... instead of telling the truth, they try to strengthen [their quarterly numbers] and by doing so, they can damage the firm," B. Espen Eckbo, the Tuck Centennial chair in finance at the Tuck School of Business at Dartmouth College.
Getting rid of quarterly guidance does not get rid of analysts creating benchmarks for a company to miss or make. It doesn't prevent share dips of a company when it announces that a new drug trial was not successful or it must close stores.
A CEO's job is to brave that impact and the board's role is to give a CEO leeway. The best a company can do is to prepare the market for the reality. The ability to do so is particularly important in industries like food and retail, which are in the process of reshaping their portfolios and business models in the glare of the public eye. Those efforts are costly and not always predictable.
"You should expect gross margin to decline somewhat in 2018," Kroger CFO Mike Schlotman told analysts. "We aren't giving guidance on the individual amounts."
Kroger shortly thereafter announced two significant e-commerce acquisitions, putting more context around that caution — and Kroger's broader plans.
Meantime, there are other changes a company can make: getting rid of payment incentives based on earnings, and changing corporate culture to shift focus away from the stock price.
"Implicitly [Dimon and Buffett] are telling CEOs we need to change things — we can't have you manipulate internal earnings just to fit some predictions. You're supposed to tell the truth, the way things are, without cutting short on any investment," said Eckbo.