The|Intangibles

Tightening the Rules

The legislators in the Canadian province in which I live recently charged the Ontario Securities Commission with reviewing corporate reporting standards in order to establish best practices for disclosure of environmental, social and governance practices. The commission has been asked to report back to the House by January 1st of this year. The announcement warranted only about 125 words in Canada's national newspaper which means it can easily die a languid death.

Behind the order to review disclosure practices (other than the standard opportunism of politicians looking to take personal advantage of a crisis in trust), is acknowledgment that the public and minority shareholders have this indistinct but genuine feeling no one in corporate boardrooms is championing good behaviour.

Never having sat on a corporate board (I have been a director on a hospital foundation board) I have no idea how discussions about things like executive compensation, minority shareholder rights, and environmental and social commitments are raised and debated. Having read Dickens, Marx, Althusser and Levy, and being ready to believe anything Gretchen Morgenson writes about boardroom mischief, I do feel a sort of native mistrust that the impact of a decision or policy on ordinary shareholders or a community ever factors into the colloquy. Worse, I end up silently cheering regulators (although seldom legislators) when they study corporate reporting standards and insist on more transparency, even though I know I shouldn't given the nasty stuff they can foist on business.

By all appearances, I'm not alone in mistrust.

But I also know that many corporate directors are honest and ethical people. They work hard to balance conflicting interests and to do what is right for the company, its shareholders and the community. So let's hope that out of the OSC's review the government doesn't default to punitive regulation. Rather it should encourage board-lead custody of ethical, inclusive and open behaviour. A good start would be to put forward suggestions for ways boards can collect and aggregate meaningful contributions (not just by shareholder resolutions and voting proxies)from people who deserve to have a say in crucial (not all) decisions -- in particular minority shareholders and 'communities of interest'.

Corporate Blogging: Still Hesitant After All These Years

More Fortune 500 companies are blogging, but the pace of growth is still shall we say restrained.

The full results of a study by Dr. Nora Ganim Barnes, Ph.D. and Eric Mattson, CEO of Financial Insite Inc., a Seattle-based research firm are available here and a summary of the key findings are in a news release by the Society for New Communications Research.

Of the findings posted in yesterday's statement, here are few of particular interest:

• 81 of the Fortune 500 or 16% currently have public-facing blogs, compared with 39 percent of the Inc. 500, 41 percent of the higher education sector and 57 percent of the nation’s Top 200 Charities.
• 28 percent of the Fortune 500’s blogs link to Twitter accounts
• 90 percent of the Fortune 500’s blogs have the comments feature enabled

WSJ Takes it on the Chin

I have no idea if this post from Molly Wood truly reflects Apple's approach to public relations ("hammer and hammer and hammer and hammer"), or if it is just the usual journalistic hectoring of public relations people doing their job.

But the pull-out quotation from the Wall Street Journal that prompted the piece demonstrates why many business people (and the demos at large) occasionally -- okay, often -- question the devotion of journalists to seeking truth from facts. Since the WSJ article uses as its source "people familiar with the matter", "these people say" and "they say" it is also fair game to conjecture, as The Molly does, whether the publication has been spun by a zealous public relations "machine".

The blame, though isn't with the public relations people, as Wood accedes, but with lame and now inadequately supported journalism:

"It’s not a crime for a company to have a good PR machine. It’s working for Apple and it has for a long time. But this is a nation that is, at the moment, finding itself in quite a pickle because we blindly believed everything that companies were telling us. So, if we’re trying to be skeptical about, say, large financial institutions and their outlandish and/or reassuring claims, shouldn’t we also cast the same critical eye on a convenient flood of information that does little other than improve Apple’s stock price a week before they have to answer to angry and worried shareholders? Or, hey, maybe the Wall Street Journal just trying to boost the Nasdaq on purpose. You know, to help the economy."

New (?) News Financing Model

A hat tip to Meghan Warby for pointing this out to me . . . A small independent daily online magazine called Tyee based in British Columbia may have the new financial model for journalism we have been looking for. Tyee is dedicated to tough investigative reporting that "swims against the current" and its editor, David Beers, is asking readers to help finance political reporting during the current B.C. provincial election campaign because of the high costs of such coverage.

But this isn't just the standard 'send us some money and we'll figure out what to do with it' donation approach. Beers wants funders to tell the publication what issue they want it to cover, and that's how it will direct the funds. The publication is committed to directing the money to reporting on the issue that the donor specifies.

So, if you are concerned about the policies, programs or track record of the candidates on, for example, gang violence in Vancouver or environmental issues, you can tell Tyee when you send in your cheque and it will use it to finance the reporting of the journalists covering that beat for the magazine. The impact? With an extra $5,000, Tyee "could pay for about 30 extra reporter days . . . an extra reporter every day of the election campaign."

Let's talk about this.