A Matter of Balance

Fox News is No. 1.  Well, at least in ratings.  Rupert Murdoch’s news channel continues to lead all time slots among cable news stations followed by MSNBC and CNN, respectively.
Many news pundits see Fox as the Republican Party’s propaganda machine, just as MSNBC reports news and opinion from a liberal perspective.   This is not “new” news, however.  The 24-hour news cycle is filled with sensational punditry instead of hard facts.
What does Fox have that the other news networks don’t?  Roger Ailes for starters.   The Fox news chief made headlines this week when he called NPR executives “Nazis” during an interview with The Daily Beast.   Ailes ripped the network for firing news analyst Juan Williams after the seasoned conservative commentator made inflammatory remarks on Fox News about Muslims.
While Ailes later apologized to Jewish groups in a letter to the Anti-Defamation League, his comments made national headlines.  And it’s not just Fox News that’s generating press coverage for inflammatory content.   Fox Broadcasting Company, Fox News’ parent, aired an episode of “The Simpsons” Sunday that parodied the recent midterm elections.  The broadcast featured a Fox News interview segment favoring GOP candidate Krusty the Clown against a Democratic challenger.
Sunday’s episode also showed a Fox News helicopter with the tagline, “Not racist, But #1 With Racists.”  No doubt this is funny stuff.  That’s why “The Simpsons” has been on television for more than two decades.  Fox has taken such liberties before in poking fun at itself.  It remains unclear, however, whether this is a ploy to make news or just funny entertainment.
Either way, conflict and controversy are main drivers of news. That’s why Fox and MSNBC lead the cable ratings ahead of CNN with their opinion-based commentary.  The question is, should PR professionals continue to feed the beast?  Perhaps we should be spending more time cultivating substantive stories that encourage constructive discourse as opposed to sensational punditry.
Easier said than done.


George Medici, gmedici@pondel.com

IR in ‘I AM’

Last week, I attended a networking event hosted by Bank of America Merrill Lynch at the Paley Center for Media in Beverly Hills. The event included an exclusive screening of “I AM,” a documentary that recounts the story of filmmaker Tom Shadyac after a cycling accident left him with post-concussion syndrome. Though he recovered, he emerged a changed man.  Known for directing films such as, “Ace Venture: Pet Detective” and “The Nutty Professor,” Shadyac embarked on a journey to discover how he, as an individual, can improve his life, and what we, the audience, can do to make our lives better.


The film explored why today’s culture is so engulfed and obsessed with competition and separation, instead of community and cooperation. The film features interviews with well-known cultural figures such as Archbishop Desmond Tutu and the late historian Howard Zinn, as well as lesser-known scientists, poets and evolutionary biologists.
After watching “I AM,” it got me thinking about how Shadyac’s film can not only be applied to each of us on a personal level, but to the business realm as well.
The film is particularly relevant to our line of work because it reminds us how important it is to understand the communities we serve, particularly investor constituencies.   The more public companies and investors understand and communicate with each other, the more likely it will enhance long-term shareholder value.  And that’s something we can all appreciate in this environment.


PondelWilkinson, investor@pondel.com

Board Diversity in the News

Last week, SEC Commissioner Luis Aguilar said that women and minorities remain “woefully underrepresented” on corporate boards, despite numerous studies that show “diversity in the boardroom results in real value for both companies and shareholders.”
Despite the best of corporate intentions over many years, the SEC adopted a new rule, which began applying to proxy solicitations on February 28, requiring a company to disclose:

  • whether diversity is a factor in considering candidates for nomination to the board of directors;
  • how diversity is considered in that process; and
  • how the company assesses the effectiveness of its policy for considering diversity.

Recently, the SEC completed a review of the filings it received and found a broad spectrum of compliance with the rule.  Some companies have done a very good job, others have room for improvement, and still others provided only a brief statement indicating that diversity was something considered as part of an informal policy.
The SEC has now begun to act on the continuing lack of board diversity, and Commissioner Aguilar suggests that companies prepare disclosure with an eye toward it being useful to investors – especially since the rule was originally adopted at investors’ requests.  Specifically, he recommends that the disclosure indicate whether the company has a policy of:

  • interviewing one or more candidates who are a minority and/or a woman;
  • retaining a search firm that has been specifically instructed to seek candidates who are minorities and/or women; and/or
  • soliciting recommendations from organizations that have a reputation for identifying candidates with diverse backgrounds.

The SEC also recommends that the company indicate how many candidates were interviewed who were women and/or minorities and highlight the diversity of the existing board of directors.
Board diversity is an issue that has stimulated much discussion, but with not enough results.  Given its importance, it’s time for businesses to make board diversity a priority.


PondelWilkinson, investor@pondel.com

The Masquerade Call

Photo Credit: Mark Loveridge via Flickr

Likely prepping for Halloween last week, several quarterly earnings calls were usurped by a rogue analyst who masqueraded as yet another sell-side analyst in an effort to freely ask questions during the Q&A session.  Most of the companies targeted were in the consumer sector, and the questions generally surrounded each company’s e-commerce initiatives.  While I applauded the individual’s effort to conduct some primary research in a creative manner, his antics were disruptive and inappropriate.
It seems as though the individual pretended to be an analyst of higher repute, using a faux identity to gain access to management when queuing up for the Q&A session.  Even though he faithfully divulged his true identity when speaking with management, the immediate reaction by the management team was one of panic and apprehension about what the person was going to say.  Because these calls are in a public forum, allowing an unknown individual to have unfettered access to the podium mic could be dangerous.
Which brings me to the topic of managing Q&A sessions altogether.  Everyone knows about the myriad online tools available to manage the conference call Q&A session in real time.  Yes, the game is slightly rigged, but if all individuals who have a question or comment are allowed their time, these calls would last forever.  The cost for hosting a conference call is also expensive, and it is imperative to monitor managements’ time.  So let me warn you now, if you are a whacko or trouble-maker short, we have the means to keep you out of the party.
With last week’s antics, it might be due time for additional rigors in the system.  To avoid conference call interlopers, managements may consider creating two call-in numbers or two ID passcodes.  Assign one to Group A (perhaps a small group consisting of your sell-side analysts) and one to Group B (all others, often the buy-side community).  Coordinate with the conference call provider and instruct them as to which group is allowed to participate in the Q&A.
Of course, these are just examples and not necessarily the best practices for every company.  But I would rather try to unmask cloaked callers than completely pull the plug on this important quarterly ritual.  


PondelWilkinson, investor@pondel.com