Communication breakdown

Mar 30 2004 by Brian Amble Print This Article

There has been no shortage recently of stories about a lack of trust between employees and their bosses abound. But it seems that the same problem exists between company bosses and their major shareholders.

Half of UK companies think they are doing a good job of communicating to their investors. But the overwhelming majority of institutions think the opposite.

A mere three per cent of institutional investors and fund managers think that firms make an effort to keep up a good dialogue with them, according to a survey by PR consultants Blue Rubicon.

The problem is compounded because business leaders have a misplaced sense of their own communication skills. Half the bosses surveyed believed that firms did a good job of communicating with investors.

Unfortunately for bosses, institutions rate communication skills as the single most important attribute that chief executives can possess beyond even their track record, integrity, vision or leadership skills.

Asked which issue would most damage a firm's reputation, more than six out of ten investors polled said lack of financial transparency.

"CEOs who believe their tenure at the top will be judged simply on their track record and financial performance are in for a rude awakening," Blue Rubicon said in its Trust in the City Report 2004.

"Trust is at a premium and numbers alone cannot build trust between companies and investors."

The survey involved 95 institutional investors and fund managers and 101 senior executives from FTSE-100 and FTSE-250 companies.