Some Clarity on Web Disclosure, and Transparency

Today’s New York Times has an article relating to my blog post last week regarding the tenth anniversary of Regulation FD and Disclosure.  The article can be found at:
http://dealbook.nytimes.com/2010/11/08/a-lack-of-transparency-in-s-e-c-disclosure-rule/

It is great to see the mainstream press focusing on the issue of web disclosure.  While I obviously agree with the points that the article makes, the interesting thing for me is the focus on Wall Street.  While Wall Street is important here, the bigger issue is the way that uneven disclosure hurts retail investors.

Individuals who neither have the technology nor time to monitor numerous corporate web sites are at a distinct disadvantage in situations where companies use advisory releases or limit disclosure solely to their corporate websites.

As one of the people who commented on the Times article stated, "disclose means making something visible for an audience, not just making it visible." This is a key point and one that should be top of mind at all times to all who are involved in the financial communications field.  It cannot be understated.

Unfortunately, it is a message that is not always appreciated by all.

The New York Times article also quotes an unnamed corporate lawyer who implies that by limiting disclosure to a corporate website, a company can avoid sharing its information with third parties thereby mitigating the risk of leaks.  What this lawyer is recommending is nothing less than communications agoraphobia!

PR Newswire has been in business for over 55 years handling market-moving information well in advance of such information becoming public.  We have invested millions of dollars in security and training and background checks to ensure that leaks do not happen.  Simply stated, leaks do not happen. Basing an argument on the most remote “what if” is specious at best; irresponsible at worst.

Thankfully, the majority of corporate lawyers I’ve spoken with contend that a company that limits disclosure or that engages in selective disclosure is making the lives of its shareholders and journalists who follow the company more difficult - and may be creating the exact uneven disclosure situation that Reg FD was designed to prevent.

Using a corporation's website should be a key part of a company's disclosure methodology as long as it is part of an integrated disclosure strategy that employs all push and pull elements available to a company.  Anything less is just an attempt to take a shortcut at the expense of one’s investors, stakeholders and the public at large.  It is wrong.  Plain wrong.

The good news, however, is we are seeing more and more respected thought leaders, such as Andrew Ross Sorkin, call out these inequities and praise the true value of full and fair disclosure.

Authored by Scott Mozarsky, chief commercial officer, PR Newswire.

For more ideas on engaging investor audiences online, read PR Newswire's new paper, IR Rising, on how IROs are leveraging online content to build audience for key messages.

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