Corporate America is Telling the Truth — Tips to Assure Reg FD Compliance

With so many voices billowing false narratives and confusion these days, it is sometimes challenging to discern fact from fiction. But amidst all the dubious rhetoric, it’s good to know that sanity still prevails in the world of public companies.

Corporate America is standing out as a beacon of clarity and truth. And this isn’t by accident. It is the result of carefully crafted regulations designed to protect investors and ensure the integrity of the market.

As a refresher, the Securities Act of 1933, affectionately known as the “truth in securities” law, mandates that buyers of securities receive complete, accurate and truthful information before they invest. 

The Securities Exchange Act of 1934, referred to as the “34 Act,” created the Securities and Exchange Commission (SEC) as a body to regulate trading of securities after they have been distributed.

And in the year 2000, the ‘33 and ‘34 Acts were further strengthened by Regulation Fair Disclosure (Reg FD), with the intent of preventing public companies from selectively disclosing important information to certain shareholders and market professionals. Rather, it created a level playing field for all investors by ensuring that material information is disclosed to everyone simultaneously.

As the 25-year mark approaches since Reg FD was enacted, and as the IPO market warms up for the new year, following are a few reminders to help issuers assure compliance:

  • Maintain a formal disclosure policy. Outline procedures for publicly disclosing information, such as through press releases and social media. Press releases are by far the preferred disclosure medium, followed by social media and the company’s website. However, if a company principally uses the latter two vehicles to disclose information vs. press releases, it must ensure that both are widely recognized as the issuer’s primary distribution channels.
  • Train employees. For companies in the process of going public, provide formal Reg FD training – in person or by Zoom – for senior staff and for those who may be privy to sensitive information, and periodically conduct refresher training sessions. Specify who is authorized to communicate with investors and analysts.
  • Anticipate disclosures. Plan ahead if possible, and when doing so, be certain to remind the inner executive circle of the mandate for confidentiality.
  • Review executive presentations. Have an IR advisor or in-house counsel review presentations to be certain they do not contain material non-public information. 
  • Establish black-out periods for trading. Black-out periods can help prevent inadvertent insider trading and Reg FD violations. Some companies limit executives to only trading on a 10b5-1 plan to avoid violations.

Through Reg FD and other SEC mandates, corporations and their leaders are held to stringently high rhetorical standards – and they are doing a good job of adhering to them. Continued compliance requires awareness, regular refreshment, and constant diligent attention.

Roger Pondel, rpondel@pondel.com

Editorial Note: PondelWilkinson has been approved by the California Bar Association to provide Reg FD training to SEC lawyers for MCLE credit, and regularly provides such training to executives of pre-public and publicly traded companies.

Fax me! No really, Fax me!

Believe it or not, “faxing” is as prevalent today as it was during its heyday of the 80s and 90s.

Financial services, healthcare, government and manufacturing industries still rely on fax technology, mostly because of security and regulatory reasons.

For many corporate communications veterans, the fax machine used to be a lifesaver. No more sending press releases via snail mail.

While cloud-based fax services have advanced the standalone fax machine, the basic principle of sending information between two dedicated points remains the same.

The same goes for corporate communications. Social media, cable and other innovations have transformed how we communicate, but what we say is still paramount.

Consider these vital communications imperatives still relevant today:

  • Make the story interesting. Whether targeting Wall Street or Main Street, the narrative needs to be noteworthy. Not every company or organization will be doing super exciting work. Leverage a unique characteristic to help cut through the media clutter.
  • Know thy audience. Rule number one when it comes to communications. Deeply understand the various stakeholders within a company or brand’s ecosystem.
  • Communicate clearly. Keep it simple and refrain from too much jargon and industry buzz words. Sometimes the use of technical terminology is required, but it’s important to explain in layman’s terms.
  • Stay on message. Keep it tight. Generally, too many action items or message points can confuse an audience.
    Spell check. Apparently good grammar and correct spelling seem to have been forgotten, particularly when communicating on social media. Review before sending. Period.

The communications industry will continue to undergo technological innovations that will alter the way Information is conveyed. But whether spoken or written, communicating effectively is a priority that should never change.

— George Medici, gmedici@pondel.com

Taking America’s Pulse Online

The Pew Research Center recently announced it would be conducting the majority of its U.S. polling online, much like most other public opinion surveys these days.

Until recently, phone-based surveys were the de facto standard for opinion polls. According to Pew’s own research, the number of surveys conducted over the Internet “have increased dramatically in the last 10 years,” driven by available technology and lower costs.

What shifting to online polling means for our long-term phone survey trends | Pew Research Center

The paradox is that people respond to online and phone polls differently. Pew calls this the mode effect, when responses to some of the same questions are different depending on the interview format.

For Pew, switching to online polling after years of telephone surveys will have an impact on quantifying historical data. This also may influence how media report on the center’s year-over-year trends.

Online polling methodologies may be shaping a new generation of survey taking. The good news is that trusted pollsters are transparent about these approaches.

And when it comes to the pros and cons of online vs. telephone surveys, a simple Web search will yield myriad results, including observations from Pew, as well as in Forbes.

Most polling firms and universities use a combination of online and telephone survey methods. It’s essential, however, that online surveys produce statistically accurate data, especially when the results are used by media.   

To help ensure reporting accuracy, the National Council on Public Polls published a list of 20 questions a journalist should ask about poll results. The irony is that reporters don’t have time to review questions because of today’s ultra-competitive “real-time” news environment. 

General consensus says polls serve a greater good helping define public opinion on everything from brands to policy. Media love surveys too. So much so that The Hill launched “What America’s Thinking,” a Web TV show that focuses on the latest news about public opinion.

As storytellers, we rely on accurate trends to help shape different narratives on behalf of our clients, whether that data is derived from the Web or via telephone.

— George Medici, gmedici@pondel.com

Lying to the Media is Never OK, Never Was, Never Will Be

A recent op-ed in the Los Angeles Times, “Who is Hope Hicks, and What’d she do?” by Virginia Heffernan has struck a chord among PR pros.

Newly appointed Hicks, 29, is the third director of communications for the current White House, and the youngest in history to hold that position.

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Hope Hicks followed by White House Press Secretary Sarah Huckabee Sanders. Photo credit: Doug Mills/The New York Times

While news of her relationship with former Trump Staff Secretary Rob Porter was not the subject of Heffernan’s editorial, the author’s portal of Hick’s job as a “flack” is what’s sending shockwaves throughout the public relations industry.

For those unaware, a flack is a pejorative term sometimes used by journalists to label less-than-scrupulous public relations people, not to be confused with a “hack,” which connotes a security breach or taxi driver, and is a term occasionally used to label a “sloppy” journalist. Both have negative connotations.

According to Heffernan, Hicks was born into a “family of high-level flacks, whitewashing the unsavory practices or grave misdeeds of Texaco, the NFL, Harvey Weinstein and Donald Trump,” a reference to her family’s work as crisis communications counselors, and now as the White House communications chief, potentially deceiving the public regarding an obstruction of justice charge.

Right, wrong or indifferent, op-eds are opinion pieces. And the author of this one certainly got it wrong when she wrote, “lying to the media is traditionally called PR.”

No, it’s not. It never was and never will be.

Ironically, the PR industry at times may grapple with its own image problem. However, references to spin doctors and flacks only perpetuate a stereotype.

PR pros are essentially spokespeople, not always necessarily quoted in stories, working in the background, assisting reporters to help them do their jobs. Whether representing a brand, association or publicly traded company, PR practitioners are usually the first point of contact between reporters and clients. Building meaningful relationships with journalists based on trust is paramount to effective media relations, and to the livelihoods and careers of many public relations executives.

Although the percentage has slipped from 2016 to 2017, PR practitioners are still the third most important sources of information for journalists, behind subject experts and industry professionals, according to the 2017 Global Social Journalism Study.

One can agree that it takes a certain skill to effectively navigate any crisis communications situation, especially in a hostile media environment. Reporter deadlines coupled with mounting pressure only adds to the stress of providing timely, accurate, and credible information. But that is what makes the PR industry so specialized.

Every profession can have bad actors, or those on occasion that make mistakes, but the PR industry abides by a code of ethics, values vital to the integrity of the profession as a whole. It’s not fair, nor appropriate, to single out one instance to characterize an entire industry.

Lying to media only gets PR practitioners shunned as ineffective communicators, which often leads to loss of clients, loss of jobs, and the end to careers.

— George Medici, gmedici@pondel.com

 

Building Better Media Relationships

Media relations are an integral component to what we do at PondelWilkinson, whether a public relations or investor relations engagement.

Crises aside, generating media awareness of corporate entities, their brands, products and services, among readers, listeners and viewers is critical to the success of any communications program.

Shrinking news departments, fewer beat reporters, and an increasingly tighter news hole, however, are making it harder to get reporters’ attention.

Another caveat to these challenges is that only 36 percent of journalists prefer to get their information from PR/IR sources, press releases, and newswires, compared with 42 percent last year, according to the 2017 Global Social Journalism Studycision-global-social-journalism-study

The good news is that experts and industry contacts remain key sources of stories for U.S. journalists. For example, while a reporter may not write about a new app or the latest software version, he or she may be more inclined to interview an executive about key technology trends, such as artificial intelligence or cybersecurity.

Media relations 101, right? Maybe not. According to the same study, only 19 percent of reporters say PR professionals provide high quality content, and just 37 percent are reliable.

Learning what’s important to reporters is vital to establishing long-lasting media relationships, essentially, helping them make their jobs easier.

Follow these simple rules for building successful media contacts:

  • Do your research, learn about the reporter and his or her area of coverage.
  • Customize your pitch, conveying why it’s important to the outlet’s audience.
  • Do not blast pitches.  Just don’t do it.
  • Provide value, such as proprietary content or a unique perspective or point of view.
  • Call first, if possible, especially since reporters are constantly inundated with e-mails.
  • Be transparent to foster credibility.

There’s no easy way to building better media relationships. It takes time, effort and a good sense of news, coupled with knowing what reporters want and need.

— George Medici, gmedici@pondel.com

The Public Relations (and Future) of Healthcare

U.S. Senate Debates Future of Healthcare Reform

U.S. Senate Debates Future of Healthcare Reform

There was a time not so long ago when healthcare was a huge mystery, understood only by doctors and industry insiders. Today, much of that mystery has been unlocked through the Internet and a curious populace, as billions of dollars are being spent marketing drugs and services to physicians and consumers alike.

The conversation (and controversy) surrounding healthcare in the U.S. continues to evolve at both the industry and legislative levels. With a divided Congress and an influx of emerging technologies, the need for enhanced communication by healthcare companies is greater than ever.

Providers, hospitals, biotech, pharmaceutical and medical device companies, among others, all have distinct reasons and needs for communicating, from securing funding, to FDA reporting and complying with other regulatory processes, to introducing new products or therapies to providers and patients.

Regardless of the reason, communication at the professional level plays a fundamental role in every facet of healthcare. In the last decade, the avenues available for reaching target audiences have multiplied exponentially, ranging from social media to direct communications.

As one example, when the FDA approves a new medication, the message a pharmaceutical company wants to convey to consumers will center around how the new therapy can improve patients’ lives; the message to physicians focuses on the medication’s safety and efficacy, patient indication and reimbursement.

Many factors are at play in a changing healthcare landscape, and uncertainty fosters opportunity. Our industry, whether the focus be investor relations, strategic public relations, product publicity or social media, is likely to see a bevy of communications firms launch new departments devoted to healthcare, according to a recent blog post in PR News.

Communications advisory firms and agencies that will thrive in the new healthcare landscape are those that can help create new narratives for their clients, along with messaging that resonates and facilitates the right exposure for an organization’s products or services among many stakeholders, including existing and potential customers, investors and key opinion leaders.

Change is the constant in the healthcare sector, and smart, effective communication remains paramount.

— Joanna Rice, jrice@pondel.com

Is LinkedIn the New Facebook?

LinkedIn these days seems to be less about posting “business” content and more around publishing selfies, memes and math puzzles.

Ironically, these Facebook-like posts generally get more traction. But all engagement is not always good engagement, just like all publicity is not always good publicity.

Interestingly enough, the Pew Research Center found that more workers ages 18-49 have discovered information on social media that lowered their professional opinion of a colleague, compared to those who garnered an improved estimation of a co-worker from online platforms. So, be careful what you post.

LinkedIn prides itself on “connecting the world’s professionals to make them more productive and successful.” What’s happened, however, is the line between “work” and “consumer” content has been blurred, causing LinkedIn professionals to lambast what they see as irrelevant posts, stating: “This is not Facebook!”

A recent post on LinkedIn.

A graphic that accompanied a post on LinkedIn.

The reality is that LinkedIn is competing with Facebook. Late last year, Mark Zuckerberg’s social network announced it was testing a feature that would let page administrators create job postings and receive applications from candidates. This undoubtedly will put pressure on LinkedIn’s Talent Solutions business, which comprised 65 percent of the company’s 3Q 2016 revenues.

With 467 million members in over 200 countries and territories, LinkedIn, now owned by Microsoft, is growing at a rate of more than two new members per second. This quails in comparison to Facebook’s 1.79 billion monthly active users, but the company’s growth shows more professionals see value in the platform.

So what does the future look like for LinkedIn? Consider the following:

  • LinkedIn will become an even more valuable business networking tool among business professionals, surpassing Pew’s estimate of the 14 percent of professionals who use the online platform for work-related purposes.
  • “Irrelevant” posts will continue, at least in the short term, but will have an adverse effect on those who publish non-related content.
  • Thoughtful, engaging and pertinent posts that resonate with key audiences will generate positive engagement.
  • Business organizations and individuals will learn how to leverage this network beyond recruitment and job searches.

Much can be said by the old adage “all work and no play …,” so it’s refreshing to see some brevity in our daily work lives. But these matters may be best suited for Facebook and not LinkedIn.

— George Medici, gmedici@pondel.com