Nice odds if you can get them

Tony Dokoupil of the Columbia Journalism Review assesses a recent Harvard Business School professor Gregory Miller’s research that concluded that the business press does a surprisingly good job of uncovering financial shenanigans at companies before a Securities and Exchange Commission investigation and concluded that the odds are still greatly in favor of corporate America.

He wrote, “But before business reporters start slapping one another on the back, please note that the majority of these cases feature information either gift-wrapped by analysts or else dragged into the public realm by legal proceedings such as a shareholder lawsuit. Overall, Miller finds that most of the time when journalists ‘beat’ the SEC, they are just doing the basics, ‘rebroadcasting’ analysts’ research or covering the courts, as opposed to purposefully smoking out white-collar varmints.

“And then one might consider that the entire business press—including Women’s Wear Daily—smokes out evildoers at a rate of five companies per year. There are more than 5,000 public companies in the U.S. If I’m a crooked CEO, I like those odds.

“Truly extraordinary reporting endeavors are even more rare in this study, comprising just over 10 percent of all cases. These feature ‘reporter-based analysis,’ which Miller describes as ‘the use of largely non-public sources to generate original information,’ otherwise known as super-reporting of the kind one hopes would guarantee awards and inspire J-school case studies, maybe even a pulp novel character.”

Read more here.