Silence is no way to defuse disaster

In his just-published memoir of his time as President Clinton’s Treasury Secretary, In an uncertain world, Bob Rubin says that there is no point in trying to explain a disaster to the press. There will be such a hue and cry that they won’t be listening. Only after the first frenzy will there be any point.

The most unnerving part of this, he claims, is coping with the ferocity of the attacks when you remain silent. I was reminded of this reading the coverage of Parmalat, the Italian dairy company that has been engulfed by what is alleged to have been a multi-billion pound fraud.

As the story unfolds, the luxury of silence – if it is a luxury – seems pretty high risk. That, at least, appears to be the European view. It is pretty obvious from the coverage that, while direct quotes are few and far between, there is a lot of background briefing going on as the various parties seek to limit damage, deflect blame, or suggest they were in another country at the time.

This is much less apparent with respect to the Americans involved – mainly banks – most of whom appear to be following Rubin’s dictum in keeping both officially and unofficially silent.

Probing a bit deeper this seems to confirm what lots of British financial public relations people have said for years – that American financial PR is not up to much. It is apparently dominated by lawyers and obsessed by legal ramifications – with the result that, in any corporate crisis, nothing much is said. For similar, legally driven, reasons it fights shy of background guidance. Most of the effort goes into writing press releases.

That is a pretty poor way to defuse a disaster, though in fairness it has always been a rewarding pursuit over there. Indeed, I recall the fuss stirred up by the Columbia School of Journalism, which found via a survey that over half the financial releases sent out in a given period were used verbatim in New York papers. The only change normally was to add the journalist’s byline.

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