Boosting in-house communications may help corporate transparency

DUBAI — In what must be a good sign for improved corporate transparency and the practice of fair disclosure across the UAE, an increasing number of larger firms are boosting their internal communication resources, or, if they do not have an in-house media capability already, are setting one up.

By Lucia Dore (Assistant Editor, Business)

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Published: Mon 1 Oct 2007, 9:14 AM

Last updated: Sat 4 Apr 2015, 11:23 PM

Banks in particular are increasingly choosing to handle more of their communication work themselves, according to one in-house media executive at a local bank. "In light of the growth that banks are witnessing there is a trend towards internal communications."

And the bigger a bank becomes the need for a strong internal communications capability also becomes greater, he said, citing the need for a more "standardised" approach as banks move into new markets. "There is a greater need to communicate, to be transparent," he said.

Aaron Richardson, media relations manager, marketing, at Nakheel, the region's largest real estate developer, agrees that effective communication is vital to ensuring transparency. "I think we have made great strides in the last couple of years. We realise the importance of transparency."

He believes transparency is best achieved by having an in-house media relations team who have been able to build up good contacts within the company so that media enquiries can be answered as quickly as possible. The role of a press officer is to dig out information, find out what's going on and respond to media enquiries in a timely fashion. An in-house team is more effective at building up these contacts, said Richardson. "This is something that is very difficult for an agency to do," he said. "It is very difficult for an agency to have these contacts."

This is not to dismiss the role of agencies however, or to diminish their importance. Richardson emphasised the importance of working with an agency to give additional support, whether it's for writing and distributing press releases, making follow-up calls to the media, or organising an event. In fact, many smaller firms still prefer to outsource their communication requirements to avoid the overheads, and other costs, associated with an in-house team.

As Stephen Worsley, director, strategy, at the public relations firm, Asdaa said: "I don't think it's a question of substitution — do you go in-house or work with an agency? Both teams can work very well together." He also noted a trend by organisations that have an internal set up, such as government organisations, to use agencies as well. "This is starting to change with the need to reach more audiences, more often and in a more dynamic way." However, even though many companies in the UAE appear to be placing increasing emphasis on transparency, some are still failing to effectively communicate their strategy to their shareholders and stakeholders, including the media. This is most apparent when it comes to key announcements and providing detail about the direction of corporate strategy. For this reason, lack of transparency is still a concern, particularly for publicly listed companies. This is somewhat surprising given that transparency, and with it effective communication, is recognised as key, not only for preserving but also for maintaining shareholder value.

Emaar, the largest publicly listed real estate developer in the Middle East by market value, has been accused of failing to provide investors with adequate information, not providing information in a timely manner and ignoring journalists' requests for answers. This has been reflected in an underperforming share price.

As Dow Jones newswire wrote a couple of days ago: "Most directors at a listed company might consider telling shareholders promptly that it's on the receiving end of a $1.2 billion lawsuit from one of its subsidiaries. They certainly ought to when it comes to such a significant piece of news. But Emaar Properties waited three trading sessions on the Dubai Financial Market to confirm the suit. In the interim, the company ignored journalists' requests for answers.

Investors voted with their feet by selling the stock."

The company also came under attack a couple of months earlier by issuing a profits warning to a select number of analysts rather than to all shareholders.

And details over its land-for shares swap with Dubai Holding remain undisclosed, negatively impacting the share price, until the deal morphed into a joint venture instead.

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