Atkinson Advisor » investor relations

CEO health issues a hot topic

admin — Wed, 04 Feb 2009 01:16:39 +0000

CEOs are often integral parts of a company’s brand. Forces that threaten to harm the CEO also can damage a company’s bottom line.

That’s the case with Apple and Steve Jobs, who is trying to protect his privacy while shareholders, customers, and the media speculate about what his health-related issues could mean for the future of the company. CEO health is one of those rare battles where important laws – rights of individuals to protect personal health information and rights of shareholders to protect their investments – are at play on each side.

At some point, a court will be forced to make a decision about which set of laws are more important. Until that time, we can only examine the prevailing forces.

The first set of forces is regulation. No rules specifically address CEO health, but two principles apply:

If a company discusses a CEO’s health issues, its disclosures must be “full and accurate.”
A company must disclose each quarter “any known risk, event, trend or uncertainty” that could affect “future results of operations.”

Every company will have to decide for itself what information is necessary to meet this regulation.

The second set of forces is confidence. Companies sometimes live and die by the confidence others place in their CEOs. Information is to confidence what oxygen is to humans. Without it, confidence and often the stock price wane.

The investment world will be watching Apple closely over the next year. During Jobs’ leave of absence, the company will have the chance to see how its stock – and reputation – performs while the face of the company takes a lower profile.

It’s the open network

admin — Fri, 07 Dec 2007 03:51:55 +0000

Verizon Wireless’ ubiquitous commercials proudly proclaim It’s The Network™. To be honest, that claim doesn’t really impress us.

What does impress us is Verizon’s decision to become the first U.S. carrier to open its network to other devices. This move is an enormous PR coup over Verizon’s rivals.

Put simply, an open network will eventually allow us as consumers to use any compatible device and software application on the Verizon network. For example, iPhone users, who are currently limited to only AT&T’s network, will likely be able to switch to Verizon’s service.

Verizon wins in many respects. It’s the first to make the announcement, which earns points with investors, analysts, and others following the business. Verizon’s decision is also consumer friendly, which is a true (and surprising) coup for the telecommunications industry.

Verizon’s competitors are sure to follow suit, and that’s a good thing for everyone.

TJ Maxxed Out

admin — Fri, 06 Apr 2007 05:48:48 +0000

TJX, the parent company of TJ Maxx, revealed in its most recent SEC filing that hackers may have stolen more than 40 million credit card numbers of customers.

Bad things happen to good companies. At the same time, they cannot hide behind the bad news.

The company learned about the security breach last December and promptly began working with law enforcement. It disclosed the breach when law enforcement officials said doing so would not jeopardize the investigation. This was the right course of action.

The latest disclosure, however, is disturbing.

Mistake No. 1: An SEC filing is no way to share bad news with customers, especially something as personal and worrisome as identify theft.

Mistake No. 2: The complete absence of the CEO Carol Meyrowitz. She should be meeting with reporters to apologize to customers for the error, explain the next steps, and tell customers how they can get help. So far, that doesn’t seem to be the case.

Security analysts estimate the breach could cost TJX $1.5 billion to fix. The loss of goodwill will be infinitely larger for every day the company buries its head in the sand.

Sound the alert to the right people

admin — Fri, 03 Jun 2005 19:23:34 +0000

Every potential crisis situation is unique, no matter how many times your company has been through a particular situation. A lack of communication is often one of the reasons that a potential crisis situation spirals out of control into a full-blown crisis.

The most important part of any crisis response is alerting and involving the right people who can help analyze the situation and recommend the best steps to solve it. This does not mean the same people make up the list every time.

The right people will vary with the situation and its potential impact. Here are some key thoughts when planning for crises:

Who will the situation impact the most? Sales needs to know if customers can be impacted. HR needs to know if employees are at risk. Investor relations for shareholders. And so on.
What are the odds of the media learning about the story? If the odds are high, the marketing/corporate communications department can help on the front end by drafting a standby statement, preparing executives for potential questions, and ensuring consistency of communications to all target audiences.
What resources are necessary to solve the crisis? Because every situation is unique, the resources to solve that situation are unique as well. As situations evolve, you may need temporary personnel, equipment, technical assistance, or office space. Anticipating these needs and having resources in place will save you valuable time and, ultimately, may save your business a lot of money.