Hancock: CEOs hiding behind Reg FD and don't talk to reporters

Baltimore Sun business columnist Jay Hancock argues that too many CEOs and other corporate executives refuse to talk to business journalists and use Regulation FD as their feeble excuse. He noted that a local CEO talked to him this week, and he thanked him for it.

Hancock wrote, “Over and over, corporate officers and directors decline to comment about anything and refer journalists to their company’s ‘public relations’ or ‘investor relations’ people. These highly trained professionals also say ‘no comment.’ Then they often tell you that securities laws sharply restrict them from saying anything except in a filing with the Securities and Exchange Commission.

“Which is wrong.

“Regulation FD allows corporations to talk to anybody about anything pertaining to their affairs, as long as it’s not ‘material’ and ‘non-public.’ In other words, unless the information reveals a substantial change in a company’s financial prospects, it’s fair game.

“But numerous companies are shy about discussing even basic issues such as hiring, layoffs and regulation. And even when information is financially significant, falling into the ‘material and non-public’ category, corporations get a free pass if they disclose it to the media. The ban on selective disclosure applies mainly to securities professionals and shareholders.”

Later in his column, Hancock noted that the PR people for the CEO wanted to read his column before it was published. Read more here.