It’s time the FSA insisted we bring back City press conferences

Around 20 years ago, a major shift occurred in how the financial press secured interviews from the senior executives who run our publicly owned companies.

In the late 1980s, public company press conferences were phased out in favour of more polite one-on-one briefings between journalists and chief executives.

If you are tempted to say ‘so what?’ cast your mind back to last September when the global banking system came close to meltdown and remember how well you were sleeping at night.

Despite the terrifying collapse of some of the world’s biggest financial institutions, as the UK lifts out of recession and the big deals return, I fear that City greed could again hold sway over the nation’s best interest.

This, therefore, is no mere technical debate.  What might have appeared to be a matter of minor import (a small change in City media practices), was in fact the start of a fault line in which the financial press lost their ability to question company executives.

The end of the press conference was instigated by the leading City PR agencies at the time.  It was the PR agencies, eager to secure better headlines for their clients, who urged them to abandon press conferences in favour of one-on-one meetings.

The agency PR spin behind the changes was that it would allow City journalists more time to ask personal questions and drill down deeper into the story behind the headline figures.

An interpretation nearer the truth is that the PRs knew that by briefing reporters in turn, they could neutralise a press corps that hunts best in packs.  In short, their clients would receive more positive press coverage.

At important press conferences, reporters usually heavily outnumber company executives.   We know that most ordinary mortals are braver when backed by their buddies.  Well, journalists are no exception.

In a press conference, surrounded by fellow hacks, journalists are emboldened to ask tougher questions that natural embarrassment or politeness can rule out. 

When meeting companies alone, normal human behaviour also pertains, and challenging questioning become polite eyebrow raising.  In other words, the hard bitten hack with the rhino hide is soon tamed.

Moreover, another benefit of conferences is that companies are unlikely to be able to hoodwink a roomful of reporters.  What one journalist might miss, 15 or so are unlikely to, providing the opportunity for further questioning in the name of transparency and accountability.

Think how differently the media might have covered the Northern Rock crisis, the bank that was first to fail in the credit crunch, if they had had the opportunity to grill Applegarth & co. at a press conference?

One sharp journalist would have asked the killer question and found out that the Rock was finding it hard to borrow from the money markets.

Others would have piled in, asking tough questions and revealing the truth: the company’s business model was seriously flawed.  At this point, the journalists had uncovered the fuller picture and the next day’s paper would have revealed how the Rock was in deep trouble.  The nation would have been alerted.

The company’s headlines might have been negative, but the outcome for the country positive.  Regulators and the government would have the true picture sooner, leaving the FSA and the Bank of England more time to consider solutions.

Most reforms are difficult to make, but surely it wouldn’t be hard for the Financial Services Authority, the main industry regulatory, to make this simple change?

While this might not address pithier questions such as City bonuses and salaries, the FSA should put a marker down and back the return of FTSE 100 company press conferences.   It’s in all our interests.

By Neil Boom
http://www.onenewspage.com