It's absolutely more important to be candid during difficult times than in easy times.
Lots of people say, “I can be authentic.” When times are good that’s very easy. But what happens when the economy tanks and their business sales are down? Is that a time when it pays to be authentic and show candor?
The golden rule of investor partnership: I want to communicate to my investors as I would wish they would communicate to me.
Say the word candor and what CEO comes to mind immediately? Warren Buffett. Why? Because when Warren started his company he actually wrote an owner's manual. You buy a refrigerator you get an owner's manual to find out how it operates. You buy Berkshire Hathaway stock, you get an owner's manual to find out how it operates. The manual codifies the principles. Principle number 12 is, “We will be candid in all our communications.” Why? Because it’s the golden rule of investor partnership: I want to communicate to my investors as I would wish they would communicate to me.
An investor-relations specialist, Laura Rittenhouse has compiled an annual survey of CEO shareholder letters since 1999 that ranks 100 big companies based on seemingly unquantifiable metrics relating to corporate culture and candor.
L.J. Rittenhouse is president of Rittenhouse Rankings Inc, a CEO strategic and investor relations company that annually conducts a benchmark survey of CEO candor and stock price performance. Her book, Investing Between the Lines, has been endorsed by Warren Buffett.