The article emphasized the fact that more than 260 of the largest U.S. companies, including McDonald’s Corp., Gap Inc., GlaxoSmithKline PLC, and Google, Inc. have spoken out against the new rules. Specifically, these companies believe that the reward for reporting directly to the SEC, potentially in excess of $1 million dollars, will discourage whistleblowers from initially reporting through the internal lines of communication mandated by the Sarbanes-Oxley Act.
The article lists several other concerns with the proposed whistleblower rules. Many question whether the already strained SEC will be able to handle the expected flood of new whistleblower complaints. Furthermore, the proposed rules do not provide adequate punitive consequences for false allegations. This potential combination increases the probability that the agency will be unable to identify serious reports amidst piles of superfluous claims.
“Technology leaves companies naked and it’s time to buff up,” says Phil Cowcill, facilitating a session at an e-learning conference I am attending this week in San Francisco.
He believes all boards and companies should embark on a workout schedule and, if necessary, hire a personal trainer so they look good under the scrutiny of stakeholders using social media. “You can’t keep technology out of the room,” Cowcill says, “so use it to learn what your stakeholders really think, feel and see.”
Your skin, in addition to being toned and oiled, needs to be thick, says Cowcill, for sometimes your stakeholders will say and do things that you feel threaten the company, but if you learn to think of them as partners rather than threats— people with whom you have collaborative dialogue—then you will gain more value than you will by playing defensively.
We discuss the recent decision by Gap, Inc. to withdraw their new logo in response to customer feedback on Twitter and Facebook.
Was Gap really committed to the logo or did they just float it on Facebook to test the response?
What have they gained in column inches and from appearing to be responsive to their customers?
What have they learned that will inform new product launches and strategic initiatives?
However you address the questions above, your answers will demonstrate the need for new thinking around stakeholder—including shareowner—engagement. How good does your board’s body look in the social media age? Leave your comments below.