Clear Is Good

And I quote: “Forgetting the business logic and the price, there will be options down the road there, I would answer your question about capable and that we weren’t really quite capable yet because our army was doing all the other stuff we had to do, particularly the systems conversions. The army will be capable to do other stuff sometime next year, which is reasonable. Doesn’t mean we will.”

Now, I know who you think said the above, but you’re wrong.

As reported by The New York Times, it was actually James Dimon, the designate chief executive of JPMorgan Chase, during an investor conference call in October when he was being quizzed about plans for a potential merger.

Maybe Dimon was just having a bad day at the microphone. He was, after all, a financial services wunderkind and well-known as a former prot?g? of Sandy Weill. And he’s now due to take over as the head of one of the biggest banking companies in the business, but one that is not an especially high-level performer.

But bad microphone days have their consequences. To wit: As a result of Dimon’s rambling incoherence, JPMorgan Chase’s stock price tanked for a while, according to the Times.

It all goes to show how important good, clear communication is, particularly in the realm of finance. If anything, the accuracy of what executives say and what companies report should be more important to them than ever because the consequences of not doing so can hit home really hard on a personal level. (Think Sarbanes-Oxley penalties, among others.)

Of course, there are times when people are incoherent or unclear because to be otherwise would divulge what they were really thinking but didn’t want to or couldn’t afford to say. Public life abounds with examples of this sort of purposeful incoherence. Indeed, some figures who continually reside in the limelight have raised incoherence to an art form (or at least a marketing tool).

It’s no secret that business executives are annoyed, to put it mildly, with the strictures that laws like Sarbanes-Oxley have put into place and that hold them accountable for the truth of what they report about their companies.

That’s really too bad for them (and if the inconvenience they feel could move me to pity I’d be writing a different column). But in light of the devastation suffered by thousands upon thousands of employees whose lives were ruined and whose savings decimated by lying executives of companies like Enron, these same annoyed executives should expect little sympathy from the rest of us for simply having to tell the truth.

But now there may be some hope for these execs nonetheless, since Rep. Michael Oxley, R-Ohio, is due to retire in January 2007 as is Sen. Paul Sarbanes, D-Md. Business Week reports that “business lobbyists should have a good chance to water down ‘SOX’ in the 2007 session of Congress.”

Why? Again to quote Business Week, “GOP leaders were never keen on the get-tough 2002 law, designed to defuse public anger at corporate scandals. But they felt a political imperative to do something to show they cared about crime in the suites.”

Now’s the time for public defenders to stand up and reaffirm that tampering with or obfuscating the truth must continue to carry stiff penalties. This is no time to blow SOX off.

Steve Piontek

Editor-in-Chief