Tag Archives: Company coverage

media

New guidebook helps biz journalists cover corporate governance

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A newly released new guidebook shows reporters how to better cover the business world and ways to spot trends in companies’ financial activities that could lead to more impactful stories.

Daniel Guerra of the Knight Center for Journalism in the Americas at the University of Texas writes, “Written by the International Center for Journalists and the International Finance Corporation’s Global Corporate Governance Forum, the guidebook ‘Who’s Running the Company: A Guide to Reporting on Corporate Governance”’ looks at how reporters can look beyond the financial statements and organizational charts of a company and seek meaningful stories on how companies operate.

“An objective of the guidebook is to help business journalists ‘pay attention to companies’ leadership and ask whether directors and management are making the right decisions, and how their actions connect to their company duties.’

“‘Corporate governance is at the heart of what goes right and wrong in business. Understanding it is vital for good business journalism,’ said John Plender, contributing editor for the Financial Times and member of the Global Corporate Governance Forum.

“Among the tips provided for business journalists are how to better define corporate governance, maximize contacts at a company’s stakeholders meeting, and identify potential irregularities in a company’s paperwork.

“The guidebook also provides insight into state- and family-owned enterprises, the compositions of companies’ board of directors and its relationship with its stakeholders, and how to better write stories on financial events and make them more accessible to readers.”

Read more here.

Binders full of women

Key lessons from the campaign trail

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There are numerous public relations lessons that corporate America can glean from the presidential campaign.

There was the role of social media.  Don’t alienate a core constituency (or customer base). It’s not all about advertising spending.  The list is long.

I want to focus on what I think are the three most important lessons that corporate executives and PR professionals can derive from the campaign.  They might seem simple, but the consequences of not adhering to them can be costly.

First, always be prepared. I’m not sure if the president’s performance in the first debate shifted the narrative and momentum toward the challenger — but his less-than-stellar showing clearly didn’t help him out. Was he not prepared? Maybe. Regardless, the lesson is stark: the c-suite needs to be prepared in every public situation — in front of analysts, customers, and the media, televised or print.

In this day and age Jon Stewart, YouTube or any number of bloggers can elevate even a slight flub to epic proportions. If you’re caught flat-footed, expect it to go viral and deal with the consequences.

Second, be consistent. Flip-flopping runs rampant in political campaigns. Companies need to recognize that they’ll be around longer than a campaign cycle and need to focus on consistency. Key messages are a company’s brand. If you make widgets, you need to reinforce why your widgets are better on a consistent basis. Stress the proof points over and over again. If you sell a service, articulate why your service is superior.

Persistence, sticking to messages, and ensuring consistency is the way to reach your base and build and solidify your brand.

Third, be clear. Not to take sides, but I’ll point out Mitt Romney’s use of “binders full of women” comment during the second debate. That phrase was confusing, became the focus of attention and alienated some voters.  The lesson for corporate executives: speak clearly. Choose your words carefully. Don’t speak in jargon – don’t use words that have no meaning.

We like to say at 30 Point that words such as leverage, catalyze, and silo all refer to something else and were interesting when applied to new situations.

Now, they are words used by people who wouldn’t be able to use a lever, fix a catalytic converter, or know how to load grain into a silo.

Bill Berkley

The public relations roadblock to accessing company execs

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The love/hate relationship between business journalists and a company’s public relations team is a well documented one.

To heighten this already contentious relationship, companies frequently use their public relations staff as a roadblock to keep business journalists from calling C-suite executives.

Why do companies, particularly publicly traded companies often do this? And is it the best strategy?

One of the most important tasks of a PR professional is to stay on and promote their company’s carefully crafted message and provide positive spin on any news that comes about about the company.

Since this is a key part of their job, PR professionals are accustomed to handling relationships with journalists, carefully preparing in advance for any question that a journalist may fire.

While CEOs are trained to handle questions from reporters to some extent as well, they most likely aren’t as prepared to field questions from reporters on a daily basis and stay perfectly on company message.

Because of this and the other plethora of duties that company executives have, it makes some sense that business journalists are often deferred to the public relations department, rather than being able to directly call executives. This often comes to the frustration of business journalists who would much rather a quote from someone inside of the company rather than spin from either an external PR firm or the internal PR department.

Is it in the company’s best interest? 

Whether it is a wise choice for a company to have its PR department field questions from journalists that may be better answered by the CEO is an interesting question. While certain companies have precedents on whether their CEOs will take direct calls from business journalists, to some extent this tone can be set by the chief executive.

If the CEO is amiable toward the media and is media savvy, I don’t think it is wise of a company to prevent journalists from speaking to the executives. In fact, it can even be to the company’s detriment, as the CEO may have the best perspective on a company’s goals and outlook.

Further, a story that contains a quote from a CEO will often get better play in a newspaper or on a website than a story that simply quotes a prepared message from a press release or PR person.

Talking to executives also allows journalists to cultivate a personal relationship with the company, which can help provide fair and accurate coverage — even if this coverage is not always favorable. Giving the CEO a chance to comment in a story that may be negative but fair may appear better to the public than a story where the CEO refuses to comment at all.

Bill Berkley, who has been the CEO of insurance firm W.R. Berkley Corp. since the company’s formation in 1967, is know for providing his blunt and honest opinions to reporters.

Warren Buffett, the CEO of Berkshire Hathaway, has also been known to speak freely with reporters and to utilize media relationships wisely. Buffett even writes his own shareholder newsletter, which is uncommon for CEOs of large companies. He also pens opinion pieces that are published by major news outlets, seeming to understand the importance of a comprehensive communications strategy.

Media savvy CEOs

An executive that doesn’t shy away from the media but instead knows how to leverage news coverage and when to take calls directly from business journalists can have the most success in obtaining the most fair coverage. This is because a reporter is able to obtain the truth from all sides and insert comments from the most important players in a story.

Additionally, as Dan Simon, a Forbes contributor, wrote in his blog earlier in October, “Senior executives who believe in the power of PR often see the greatest results and those who don’t almost always end up with the less positive outcome they predicted from the start.”

Simon goes on to point out that CEOs who believe in the power of public relations often see better results in the media not because of “the power of faith” but because these are the executives who take actions to help boost the company’s public relations.

Executives who understand and believe in maintaining a relationship with the public and with the media will seek out opportunities to enter conversations about their industry, whether that be speaking at conferences, taking a reporter’s call or blogging and writing opinion pieces.

“Naturally this results in better conversion rates of interviews to coverage and better relationships with key influencers,” Simon wrote.

Thus, the company that will be most successful in promoting its message and maintaining a positive relationship with business journalists will be the ones whose top executives will happily take the calls of journalists, rather than creating a PR roadblock for them.

mergers_acquisitions

Why an investment bank deal matters

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Stifel Financial agreed to buy investment bank KBW, which specialize in advising on financial services mergers, for $575 million in cash and stock. Stifel decided to take the KBW name, indicating it’s a valuable brand.

Here are a few excerpts from the New York Times story:

The combination, announced on Monday, signals what many think could be the beginning of a period of consolidation in the financial services industry. While banks and brokerage firms have recovered since the economic crisis, a number of factors — increased regulatory burdens, pressure on commissions, and persistently low interest rates — have combined to crimp profitability.

Stifel’s acquisition deal echoes the very advice that KBW has been giving its clients — that now is the time to invest in financial services companies. Banks have seen signs of stabilization, including credit trends improving across their loan portfolios. Year-to-date, banks and insurers are outperforming the broader stock market for the first time since 2006.

“You’ve told me a number of times that now is the time to invest in financial services,” Ronald Kruszewski, the chief executive of Stifel, said to KBW’s chief, Thomas B. Michaud, during a call announcing the transaction. Mr. Kruszewski then joked: “It’s probably a little late for me to change my mind.”

 The acquisition of KBW, which is based in New York, extends Stifel’s aggressive expansion strategy executed over the last five years. Stifel, based in St. Louis, bought the technology-focused investment bank Thomas Weisel Partners in 2010 and last year made a large investment in Miller Buckfire, a New York firm specializing in restructuring.

Other companies that it has picked up include the fixed income specialists Stone & Youngberg and the New Jersey brokerage firm Ryan Beck & Company.

It’s interesting to note that in a time where many banks are retrenching, looking at different strategies and in general trying to figure out how to make money or reduce staff, Stifel is expanding. The firm is moving into different businesses and areas of risk. Contrast that with firms like UBS that are announcing cutbacks or others that just simply aren’t doing business.

Here’s an interesting fact from the Wall Street Journal:

Small shops such as KBW, with 448 employees, now compete with giants such as Goldman Sachs Group Inc. and Morgan Stanley amid a dearth of deal making. U.S. commercial-bank mergers are on track for their lowest annual total in at least two decades.

KBW, which last year announced a plan to reduce staff by 15%, has posted $36 million in losses since the start of 2011 amid a series of restructuring charges.

Bank investors have been expecting a wave of consolidation since the crisis, but they have been largely frustrated by the slow U.S. economy and low interest rates, which crimp industry profits by compressing the spread banks earn borrowing and lending.

And this from Barron’s is also noteworthy about the transaction:

Stifel derives more than half of its net revenue from its global wealth management group, which earns commission catering to the investment needs of high-net-worth individuals.

The firm has a small commercial bank, which currently accounts for a minimal portion of revenue. Meanwhile, investment-banking activities such as fixed-income underwriting, institutional trading and financial advisory generate the other 40% of Stifel’s business.

On Monday, KBW reported that its third-quarter loss narrowed as total revenue rose, amid a 34% increase in its principal transactions revenue.

Roughly $250 million in excess capital on KBW’s balance sheet is expected to be immediately available to Stifel upon closing. Plus, the deal is expected to increase return on equity by 10% to 16% and would be 5% to 7% accretive to earnings after expected cost savings were achieved.

So Stifel gets a name, top-notch specialized investment bankers and $250 million in capital to put to work. KBW gets to stick around in name and the diversified earnings from both firms should help the business be less cyclical.

As the average person, this seems like an inside-finance type story, but it does matter. Mid-market investment banks make loans to companies that might be too small for the bigger guys. They also tend to be located outside New York, providing diversification in a consolidated industry.

Bankers for bankers might seem redundant, but KBW has built a solid firm that needed cash, something Stifel seems more than ready to provide these days.

Shop Talk

Charlotte paper expanding small business coverage

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The Charlotte Observer is expanding its small business coverage with a dedicated page on Wednesdays, writes business editor John Arwood.

Arwood writes, “From retail shops to small manufacturers to Web design firms, small businesses power the economy. And on Wednesday, the Observer introduces expanded coverage of local small business, with a weekly two-page package of news, profiles and tips.

“‘ShopTalk: Your Small Business Help Center’ will run every Wednesday, and we think you’ll turn to it again and again to learn how local entrepreneurs have solved a problem, met a challenge or carved a unique niche. You’ll also find online extras, including a small-business blog, and we’ll invite you to be part of the conversation.

“Our small-business reporter is Charlotte native Caroline McMillan. Reach her at cmcmillan@charlotteobserver.com or 704-358-6045. Find her on Twitter @cbmcmillan. And watch for our expanded coverage starting Wednesday.”

Read more here.

Private Empire

Exxon book named biz book of the year

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Steve Coll won the Financial Times and Goldman Sachs Business Book of the Year Award 2012 for “Private Empire: ExxonMobil and American Power,” published by The Penguin Press and Allen Lane.

The book is a hard-hitting investigation of the notoriously secretive ExxonMobil Corp., beginning with the Exxon Valdez accident in 1989 and closing with the Deepwater Horizon oil spill in the Gulf of Mexico in 2010.

The award, which recognizes the book that provides “the most compelling and enjoyable insight into modern business issues,” was presented Thursday evening to Steve Coll in New York by Lionel Barber, editor of the Financial Times and chair of the panel of judges, and Lloyd C. Blankfein, chairman and chief executive officer, The Goldman Sachs Group Inc.

Private Empire is forensic, nuanced and extremely well written,” said Barber in a statement. “It is the story of ExxonMobil, one of the world’s most powerful companies. Through a series of compelling narratives, it covers Exxon’s huge geopolitical footprint and its influence. No other book on this year’s shortlist exposes so much information that we did not know.”

Coll is a writer for The New Yorker and author of the Pulitzer Prize-winning “Ghost Wars: The Secret History of the CIA, Afghanistan, and Bin Laden, from the Soviet Invasion to September 10, 2001.” He is president of the New America Foundation, a public policy institute in Washington, D.C. Previously he served, for more than 20 years, as a reporter, foreign correspondent, and ultimately as managing editor of The Washington Post

Read more here.

Thomson reuters

Reuters parent reports drop in earnings

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Thomson Reuters Corp. reported on Friday a 15 percent fall in operating profit because of declining revenue and higher costs at its division that serves the financial industry.

Jennifer Saba of Reuters writes, “While the global news and information provider reaffirmed its 2012 forecast, its underlying operating profit, which excludes divestitures, fell to $585 million from $690 million. The corresponding margin slipped to 18.5 percent from 21.6 percent in the same period a year ago.

“The company said that in the third quarter last year, its underlying profit margin was ‘the high-water mark’ for 2011.

“Third-quarter revenue from ongoing businesses this year rose 1 percent before currency changes to $3.2 billion. That is in-line with analysts’ expectations, according to Thomson Reuters I/B/E/S. Stripping out acquisitions, divestitures and currency changes, revenue fell 1 percent.

“Thomson Reuters’ Eikon desktops totaled 25,600 at the end of the third quarter, up about 35 percent from the end of the second quarter.”

Read more here.

Money

Do earnings delays matter?

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It’s earnings season. With the striking by Superstorm Sandy on the nation’s financial hub, many firms delayed reporting earnings this week. The list included Pfizer Inc, Time Warner Cable Inc., Thomson Reuters Corp., Spirit Airlines, and NRG Energy Corp.

Which raises the question, does it matter that companies delay reporting? And what does it mean for reporters and editors?

First of all, when earnings reports are delaying for major news events – not internal company problems – it seems to warrant little attention. It’s understandable to delay reporting so people have time to put finishing touches on releases and executives can physically get to the office to host earnings calls.

It can be hard for newspapers and reporters. Most coverage, attention and column inches are devoted to covering the storm, clean up and giving the public important – sometimes lifesaving – information. Attention has already shifted to the biggest and dominate story. Of course, news organizations don’t have a load of emergency reporters to cover the news; they only have their staff writers.

That means the Pfizer reporter is probably out working the hospitals and other health care service providers to write those important stories.

Earnings will all get less coverage since they all came out at once. Company news that was spread out for two or three days got jammed into the end of the week. This leaves our already strapped reporters juggling a rush of information. The delays also pushed announcements closer to the election, yet another critical story competing for space.

That said, space on the web is infinite. Wire services such as Dow Jones, Bloomberg and Reuters can publish as much and as often as they like. There is definitely no limit, other than what reporters can physically write, to how many stories these organizations can cover and how in-depth the reporting.

But investors are taking note, no matter when the earnings come out. For example, Pfizer reported a disappointing 14 percent drop in third-quarter profit and lowed its forecast. The stock dropped more than 1 percent on the news.

While it might make life harder for reporter and editors who are already over worked and chasing many stories at once, the delays aren’t escaping attention from investors. And ultimately, that’s who really matters – those buying and selling the stocks.

Internet content

Just be transparent about it

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A growing trend in journalism revolves around branded or sponsored content — individuals or companies pay to place their editorial creations alongside the “real” journalism.

It’s not new; advertorials have been around for a while.

But more and more websites are allowing it — even some run by major news organizations — and the line is blurring. It’s not always clear what’s “real” and what’s someone with an agenda is placing.

On the surface, I don’t mind it. Yes, I know, it runs smack into the basic tenet of journalistic independence and all that. But, if it’s clearly labeled as a story told by a company and paid for by them than I don’t see the issue.

Last year, When Nissan CEO Carlos Ghosn toured the carmaker’s earthquake-damaged plant in Japan a camera crew followed him around. That crew was in-house employees of Nissan’s newsroom. The content was posted on the company’s website and shown on YouTube. It was well done. I watched it.

Why not take the initiative and create your own story – about a product, about an issue (climate change, obesity), whatever the case be? In the days of shrinking news holes, I don’t mind companies standing up and going outside the traditional journalism box to tell their story.

I currently have a publicly traded client who is not getting a fair shake in the local media in which they operate. A litigator clearly has the reporter wrapped around his finger; the newspaper’s editor is not interested in hearing the other side of the story. In these cases, I believe a company should create its own medium. I don’t mind recommending a pay-for-play situation.

What I do mind is when the line is blurred and when I can’t tell when the content is company produced. I don’t want to name any names here, but on some sites (yes, major big journalistic enterprise ones), it’s hard to tell the difference.

That’s disingenuous. Clearly state who is writing this and who the author is working for and then – if the story is well presented – you’ll have an audience of at least one.

Interviewing

Analyst fired for talking to biz reporters

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A Citigroup tech analyst has been fired from his job after he talked about Facebook’s initial public offering with business journalists.

Stephen Foley of the Financial Times writes, “Mr Mahaney, one of the most widely-respected and quoted analysts in his sector, was given a ‘letter of education’ in April this year about his failure to adhere to the bank’s internal policy about seeking approval before speaking to reporters, according to court documents filed in Massachusetts.

“The filing also reveals that an analyst in Mr Mahaney’s team sent an early draft of the bank’s research note on Facebook to a friend who worked for the TechCrunch blog, asking for feedback.

“Citigroup was one of the lead underwriters on the Facebook flotation in May and was given privileged access to Facebook management and financial information. That analyst, who was not named, was fired last month.

“The incident for which Mr Mahaney was fired this week took place in April. He told a reporter from the French business magazine Capital that he believed Google’s revenues from its YouTube video sharing site would outstrip his published forecasts.”

Read more here.