Board members and business journalists

Two conversations I’ve had this week about board members of publicly traded companies have got me thinking about directors and business journalists.

The first conversation was with a student in my “Business Reporting” class.

Each student in the class has to write a final project paper on a publicly traded company here in North Carolina. I encourage them to talk to as many people as possible, from company executives to analysts to investors to customers to, yes, members of the board of directors.

The student told me that she had found a board member of her final project company was a business school professor. She had approached him for an interview, but he declined. She couldn’t understand why he didn’t want to talk.

The second conversation was with someone who has been on a number of boards, including at least one Fortune 500 company, over dinner and drinks last night.

He wondered why, in the coverage of the departure of the J.C. Penney CEO, there wasn’t any mention in the stories about its board of directors — whether any of them had retail experience and who among them was the leading force in making a change in the executive suite. He noted that he had yet to see a board member quoted.

All of this leads me to wonder why companies, especially publicly traded companies, put such a lid on having their board members talk to the media.

Board members, above anyone else, should be great people to put in front of business journalists. They are the ones who know the company’s strategy and what the CEO is trying to accomplish. Whether the strategy is good or the CEO is being fired, these board members — particularly outside directors — are the most objective sources that a company can have, or that a business reporter can interview.

Yet I know of few companies who allow their board members to talk freely to the media. Virtually all of the time that a business reporter called a board member, the director refers the journalist back to the public relations staff. As a result, they come off as being afraid to talk, or ignorant of what is really going on at the company.

Why would seeing board members quoted in stories be good? Let me give you an example.

In 1997, I covered the Coca-Cola Co. for the Atlanta Journal-Constitution. CEO Roberto Goizueta was diagnosed in September with cancer, which was a big story. He had been the CEO for 15 years and had led the company to great success. The question was what was going to happen to the company if he should die — and he did die two months later.

I called a Coke board member, SunTrust’s Jimmy Williams. He had visited with Goizueta in the hospital, and his comments to me, which I included in the story, were reassuring to investors in the company who were likely nervous about its future prospects.

That’s unlikely to happen today. In the 21st century, in the wake of Enron, WorldCom and other corporate scandals, directors don’t want to talk to the media. They’re afraid their comments might be misconstrued or that they will come off ignorant about what’s going on at the company.

I say that’s bunk. If you’re a board member of a company, you should be willing to stand up for it, talk about it with the business press. By doing so, the public will have a better understanding about what is going on at the company.

And the company’s relationship with the business media will be less adversarial.