The O'Brien column: Companies that persist in corporate-speak drivel

By Peter V O'Brien

Friday 4th October 2002

Corporate-speak experts and their associated hangers-on in the PR industry enjoyed another year producing sugary explanations, careful justifications and drivel (some of the last incomprehensible) about public company affairs.

Company directors and executives who employ these people in-house or under contract seem unable to realise shareholders, potential investors and the public can see through the verbal smoke.

The "industry" is counter-productive. Too much output creates cynicism about distortions of reality and cover-ups. The issue goes from companies to government and quasi-government agencies, most of which have one or more available to front the media and "explain" (justify, smooth over) the latest foul up.

Chief executives used to have that responsibility and accepted it. Their attitude changed, partly as the result of ill-informed and self-opinionated pre-judgments, constant interruptions and blatant bad manners from denizens of Television New Zealand and National Radio, who confused such behaviour with probing questions. A desire to protect themselves is another reason.

Notable exceptions to submission to media intimidation are New Zealand First leader Winston Peters and Auckland mayor John Banks. There is no need to be a political fan of those people to admire their slapping down of stroppy questions, to the extent of saying they will terminate the discussion. The stroppies invariably back off.

Companies persist in corporate-speak, as seen in recent examples. Lyttelton Port Co told the Stock Exchange on September 20 it would "be calling for corporate advisers" to help the company evaluate and benchmark corporate strategies, company structure and ongoing financial advice."

The "adviser" would provide advice on: appropriate corporate structure; optimal financial structure; mergers, acquisitions and divestments; evaluation of material capital projects and contracts; any other matters as agreed between the parties.

Lyttelton Port has a problem in that major shipping companies demand 24-hour, seven-day operations for new generation container vessels. Unions object, at least so far; a standard stance.

The big advisers will doubtless produce a report for mega-bucks to deal with matters for which directors and executives have specific responsibility and were presumably appointed on the basis of their competence. They receive appropriate remuneration.

It is hardly coincidental that the end of the company's announcement referred seekers of "further information" to contact a person at "Glass Tower Strategic Communications."

Note the "Strategic Communications" part of the name. No longer do we have "PR" or "press statement writers." "Strategic Communications" is the new order. The rest of the name, "Glass Tower," would not be lost on cynical market observers.

AMP followed Lyttelton Port in the gloss stakes, although its sugar and smoothing was a relatively lengthy process. Cynics saw an ironical side to the company's problems with its UK Pearl operation, given the AMP approach to information releases. There is no need to labour the "pearl" reference. Most literates got the point.

The AMP's statements reached a zenith or nadir on September 24 when the company "announced" that managing director and CEO Paul Bachelor had "stepped down." Chairman Stan Wallis would oversee the appointment of a new CEO and "continue as chairman for approximately six months." The statement included this corporate-speak: "'On behalf of the board I want to thank Paul for his contribution to the company and we wish him all the best for the future,' AMP's chairman Stan Wallis said.

"Mr Batchelor said: 'It has been a privilege working at AMP. It is a unique Australian company with many talented and committed people and a strong future.'"

The foot of the statement, which announced the appointment as acting CEO of the then current chief operating officer, financial services, Andrew Mohl, had three "inquiries" references, all in Sydney. There were two "media inquiries" and one "investor inquiries." No names/telephone numbers of the bigwigs.

You would think they would have learned something from the Westpac Banking Corporation debacle some years ago when half the board "resigned" on a Friday afternoon. The bank hibernated for the weekend.

Dairy group Fonterra told us through the quote of the general manager, New Zealand Milk Products, Alison Andrew, on September 23 it looked forward "to being able to meet with the [Commerce] Commission to present the facts as we see them" about investigation into the price Independent Dairy Producers was required to pay Fonterra for raw milk.

Leaving aside that Ms Andrew could have been better advised to refrain from instant reaction, "inquiries" were referred to Fonterra's "director, corporate communications," which seemed a fancy title for a troubleshooting PR person.

Finally, Hallenstein Glasson said it was "monitoring" closely its position in Australia, where things were apparently below budget. Big deal. Directors and executives have responsibility to "monitor," even hourly.

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