The point of corporate communications is not to entertain, but to tell the truth
The leader of a public company has a duty to inform the public of material events that an investor, actual or prospective, would consider significant in deciding whether
to buy or sell the shares. He or she must tell the truth – and tell it as soon as is reasonably practicable. He has no duty to spin, nor to comment, nor entertain, although in the pressure of the moment, many go down this path.
The audience, in the form of the media, have much more freedom. They can comment, they can entertain, they can write, or broadcast, from a point of view: left or right, capitalist or communist, young or old. Some public-service broadcasters have duties imposed by the state; the BBC, for example, has a duty to be “impartial” in its coverage. But while many in the private media strive mightily for accuracy and have strong ethical standards, they are entitled to select what they report, and decide upon which particular facets in the diamond of truth they wish to shine their light.
A chief executive has no such luxury. He has to tell it like it is, and dangers surround him if he launches into the areas of comment or entertainment. “A storm in a teacup,” “a minor incident,” “a forgivable error” can be claimed by the commentators, but less easily by the miscreant. It can be hard to stick to the mantra of “facts only” in a fast-developing, unexpected and unwanted situation.
Viewed this way, however, communication becomes much simpler; the rules are straightforward. First, find the truth. (This is not easy in complex organizations that have lost their way.) When the truth has been found, if it is materially different from market knowledge or perception, tell it; tell it all and tell it as often as needs be – but repeat the same message on the same facts. There is no need to improvise, nor to elaborate. As pressure rises, the same truth can be repeated. This is now commonly done, for example, in corruption cases.
“The Board will not allow corrupt behavior in this company and will sort it out at once,” is a typical example. This statement is fact. It tells the market what
the view of its Board is, and shows their determination to deal with it.
It is tempting to shift from the provision of necessary information material and useful to the market and, under pressure, stray into the realms of entertainment – “feeding the beast” may be the function of the media, but it is not the function of the company.
The CEO is concerned with what the public needs to know. He may wish to elaborate and expand, according to his temperament, but he would do well to always bear in mind the questions, “Am I informing or am I entertaining?” and “If I comment, why do I comment?”
One last word – on apologies: When disaster strikes, an apology is often necessary and usually welcome. It shows ownership, courage and sympathy. It need not become an admission of legal liability; lawyers’ fears in this area are overdone.
One can be very sorry that something has happened, whether an explosion or a share price collapse; saying sorry and expressing sympathy with the victims is a proper human instinct. Sympathy and sorrow and a determination to put things right are not the same as professing guilt. Apologies need not be about fault or liability – they are about empathy.
Rob Webb QC is a Brunswick Senior Adviser based in London.