Long before US Presidents started believing the most valuable of talents was a Twitter account that allowed short and sharp utterances of nonsense, the third statesman to rule over the United States, Thomas Jefferson, made a profound observation.
“The most valuable of all talents is that of never using two words when one will do,” Jefferson proclaimed.
Two hundred years later and President Jefferson’s opinion continues to hold true as his sentiment was thrust into the spotlight in a thought-provoking newspaper article by The West Australian‘s senior business reporter Sean Smith.
Smith argued that too many ASX announcements failed the basic “plain English” test as companies overcomplicated their message.
Based on the social media response to Cannings Purple’s posting of Smith’s article, his views resonated with many investors.
“Many listed Australian companies still take refuge in the long-winded technical or legal language that fulfils their compliance obligations but leaves shareholders shaking their heads in confusion,” Smith, one of Australia’s most respected business reporters, argued.
The reality is that ASX guidelines on what can and cannot be disclosed, and how, are rigid and need to be abided by.
Our sharemarket regulators have rightfully cracked down on ASX announcements that are high on promise and light on substance. There are standards and constraints that must be adhered to by ASX-listed companies wishing to update investors on both good and bad news.
It is vital – in Cannings Purple’s view, mandatory – that announcements receive technical and legal sign-off before they are sent to the ASX for public release.
But do not lose track of the narrative.
This does not mean that the drafting of ASX announcements should become a tug-of-war between supposedly competing forces of legal, technical and strategic communications practitioners.
As CSA Global principal consultant Ivy Chen voiced so succinctly on LinkedIn this week: “No one profession is better than another at communicating critical information. A collaborative effort between technical, legal and communications professionals is going to give shareholders the clearest, most relevant and compliant information to base their decisions on.”
It is true – the best ASX announcements are the ones that incorporate input from all the skills around the drafting table.
In today’s environment, more so than ever, clear and precise communications rule the day. That is the case for all announcements, whether positive or negative.
Importantly from an ASX-listed company point of view, ensuring its communications are understood by the full spectrum of shareholders is critical at a time when investors are suffering from information overload.
Make sure you are correct in what you say but don’t lose sight of the purpose of your announcement.
Getting it right – legally and technically – does not mean your announcement has to compromise on narrative and flow.
Use the significant skill set at your disposal to produce the best possible communication, and one that resonates with its intended audience.
Peter Klinger is Cannings Purple’s Director of Investor Relations and has provided strategic communications advice on more than $2 billion worth of corporate transactions over the past two years. Peter is a former Business Editor of The West Australian and has also worked for The Times (London) and the Australian Financial Review.
