10 excuses for boards
NOT to blog
By Pam Agnew, ABC and Dominic Jones
IF YOU'RE really quiet,
you might hear the wringing of hands of corporate
secretaries and general counsel everywhere. The
idea that boards might blog or use some similar
web technology to communicate directly with shareholders
may sound frightening, but it's a development
whose time has come.
Here are some of the thoughts, debates, myths
and issues boards might discuss in the hope
they won't need to blog:
1. There is no law
saying the board has to blog, so why would we
open ourselves up to potential additional risk?
Our View: A board
blog is simply a website under the direct control
of the board. It allows for direct, informal
communication between the board and shareholders,
unfiltered by management of the company. It
would help boards make better decisions with
the benefit of understanding the perspectives
of the people they represent. If anything, this
would reduce the risk of directors making bad
decisions that will get them sued.
2. Our culture has
always dictated that we are never early adopters,
but followers. So let's wait until all our industry
board peers are blogging and then we'll follow.
Our View: The leaders
will reap the benefits sooner and given how
quickly some companies are already adapting
to blogging, there is little relative lag time
for followers, without them being seen as completely
unresponsive to shareholders. Indeed, there
is more risk in not blogging. Like a "no
comment", the perception is that you want
to hide or have something to hide.
3. This is something
new, a big change, and the technology is complicated,
we need time to figure it out.
Our View: Once you
are shown what blogging is all about and how
easy it is and what it means to your stakeholders,
you'll want to blog. It's quick, simple
and easy to use technology — and no, you
don't need to fear the oddballs, you'll only
be blogging with shareholders — the people
you are accountable to.
4. More processes would
be needed. Who'd run the program and manage
it internally/externally? Approval processes?
Whose budget would it come out of?
Our View: Again it's
simple, cheap technology. If you have someone
on your board who can type and has an Internet
connection, you can post information to a blog.
Yes, you need to establish some protocols, but
that will be second-nature to boards. The costs
to customize an off-the-shelf blogging software
platform to accommodate shareholder IDs will
be small. In some cases where boards adopt a
completely open approach, it would be free.
Preferably, the blog should be managed by the
board directly, but it can be outsourced to
an outside firm or run through existing corporate
structures — most likely corporate secretaries
along with input from IR, PR and new media/web
departments.
5. Who on the board
would be "authorized" to blog on behalf
of the board? What if there were diverse board
member opinions on topics? How would this be
fairly represented? And what would protect the
brand reputation of the board/firm from the
odd rogue director?
Our View: All directors
should have the right to express their opinions.
However, the non-executive board chair or lead
independent director should speak on behalf
of the whole board. Committee chairs should
be able to write on behalf of their committees,
with the approval of the full board. If there
is dissent on an issue, the dissenting directors
should have the right to put forward their views
alongside those of the board majority. If you
have a loose-cannon on the board, let them expose
themselves and allow the shareholders to make
up their own minds about them.
6. How much time will
this consume? How practical will it be to get
back to investors within 48 hours or less?
Our View: A little
more time in the beginning as the blogging set-up
gets established, but less time than existing
shareholder correspondence and meetings over
the longer term. And, you can set the policy
as to how soon you will respond. Although some
in the blogging community will tell you you
need to blog every day, that doesn't apply in
the case of board blogs. Your site should be
updated when you have something to report or
when you want to ask shareholders for input
on a specific issue or topic.
7. Egos are big on
boards. Consider, "Well, if Joe Director
can blog, I want to blog too. We are all equal
board members."
Our View: Each board
member is accountable to shareholders. Each
board member should have a say and blog if they
want to, either through comments or through
official posts.
8. If the board communicates
more and uses blogs to do so, what will the
corporate policy implications be for the rest
of the organization? Under what circumstances
will all employees be allowed to blog?
Our View: There has
to be a coordinated roll-out and update of employee
conduct manuals/codes and compliance procedures
to include the world of blogging. We believe
every employee has the right to blog on their
own time at home, provided such blogging does
not contravene their current employment contracts
for protecting confidential, proprietary and
material information. Special allowances can
be made for marketing/sales and PR/investor
relations folk who should blog on company time
through company owned blogs.
9. What's wrong with
how we do things now? We already are meeting
with shareholders to discuss issues. I don't
see why we need to bring these discussions out
into the open?
Our View: A board
blog is more inclusive. Currently, only the
biggest, most poweful investors get to meet
with directors. You can still have private meetings
with those who choose that route. However, we
believe shareholders will prefer to use the
blog so that their views can be seen by all
of the shareholders. The board wins by taking
this major step and being accessible and at
the cutting edge of shareholder communication.
10. Why on earth would
we provide a forum for people to criticize us?
Our View: Open communication
leads to less criticism. Shareholders with illegitimate
or poorly thought out points of view will show
themselves, while the Board can demonstrate
its accountability to all shareholders by dealing
with criticisms constructively and decisively,
showing respect for differing opinions and providing
the context for why the board has taken a particular
position on an issue. The choice is simple,
boards can either own the debates or be the
subject of them.
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