Execs Who Love to Talk

07 April 2010

I recently came across a junior mining company that has been the subject of acquisition rumors for quite some time.  Senior executives with the company have always been careful with their public comments surrounding acquisition questions from analysts, investors, and financial media.

Then one of their operational executives slipped, and slipped badly.

While at a mining conference the operational executive informed a Reuters writer that the company is engaged in talks with a number of senior metals and mining companies and that an acquisition is imminent. He didn’t stop there.  He also made comments about his company’s stock price being too low and that it would by 2 to 3 times higher once an acquisition is announced.

Operational executives are great, aren’t they?  They play a very important role in advancing the business and ensuring that the company runs smoothly.  But sometimes they talk too much.

Small mining companies don’t have a monopoly on operational executives who talk too much.  Such executives are in most industries and with companies of varying sizes.

While it is easy to blame the executive for saying too much, I blame the IR and legal departments.  IR and legal play an important internal communications role.  They need to develop solid strategies for communicating their internal company rules around fair and timely disclosure.

Fair disclosure is a tough concept to grasp, even for bright superstar executives who are excited about their company’s future prospects.  Navigating through the fine lines and large grey areas of fair disclosure is not easy.

What’s your strategy for communicating fair disclosure rules with your company’s staff?

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