How honest should I be?

By Claire Bodanis, Founder, Falcon Windsor

Writing this on a Sunday afternoon, and reflecting on the meaning of truth, I hear the sermonising voice of John 8:31–32 in my ear ‘ye shall know the truth and the truth shall set you free’. In the other ear, rather louder and causing me to shut the study door, I hear the effusive presence of my visiting niece — which, since she’s a law student, prompts me to ruminate on the legal aspects of truth, leading me to the oath given in court to tell ‘the truth, the whole truth and nothing but the truth’.

I’m in my study on a Sunday afternoon because it’s peak corporate reporting season. December year-ends are starting their final push through the barrage of amends towards the glorious D-Day of publication, while the March year-ends are in the thick of the intensive thinking, creative stage. The critical question of truthfulness is much on my mind — for it is a question that must constantly be asked, and answered, at every stage of writing and producing an annual report.

Before you splutter into your coffee, don’t worry — I’m not for a moment suggesting that any of our clients tell untruths in their annual reports, or indeed, that we’d be advocating such practice; of course not. But there is a world of difference between not saying something that is untrue, and telling the truth, whole or otherwise.

Opinions vary hugely on how far the annual report should go in telling the whole truth. As a very broad, sweeping generalisation, lawyers and risk management folk tend to want to keep reporting to the very conservative end of telling as little as one can possibly get away with; communications people (although not all) tend to want to tell a story. And telling a story means revealing far more — because a story requires opinions, feeling, emotion. Ah yes, I hear you say — but that story might not be true! And here’s the rub: in an annual report, the story has to be true — because a) any facts must be verifiable; and b) you can expect to be held to account for any opinion offered or commitment made.

Surely, then, it’s far safer just to present the facts and say as little as possible? Yes, of course it is. No one can sue you for saying nothing beyond what is legally required. But just because it’s safe, doesn’t mean it’s right. There’s a reason that reporting regulators talk about openness as well as honesty; about telling a story as well as presenting facts — because, while you can be honest without being open, you can’t be open without being honest.

The reason openness is as important as honesty goes to the heart of the purpose of reporting: to engender trust.

Imagine a company is a person, let’s call him Matthew. (It’s still Sunday, after all, and we’ve already had John.) Matthew wears a dark, nondescript grey suit, white shirt, plain blue tie, black socks and black, nondescript lace-up shoes. He volunteers nothing beyond what is absolutely necessary for basic politeness, replying to every question with as minimal and factual an answer as he can get away with. No flicker of the eye, no twitch at the corner of the mouth, no gesture of the hand reveals any emotion whatsoever.

Are you likely to trust Matthew? Believe what he says? Want to be his bosom friend? I doubt it. However truthful he may indeed be, the more common reaction to someone like Matthew is ‘he must be hiding something’.

The same is true of companies. Why? Because companies are made up of people, and ultimately it is people who are doing the doing that is being reported, however much this doing may be hidden behind passive linguistic constructions and convoluted, obfuscatory language.

Readers of your report know this, and will take away a story from your annual report whether you choose to give them one or not. Far better that you do, than leave them to write their own, which will inevitably, human nature being what it is, not resound to your favour. I’m not advocating washing your dirty linen in public, that would hardly be courteous to your reader. But perhaps acknowledging that you, like everyone else, have a dirty linen basket, that you do the washing once a week and prefer Ecover to Sainsbury’s own brand, might be a good start.

Wishing you all the best for as relaxing and stress-free a reporting season as possible!

Originally published at blog.falconwindsor.com on February 6, 2019.