A brace of US-based company bosses got high on the same fumes that inflated the bubble at the turn of the new millennium and mislaid their honesty compasses.  Bernie Ebbers at Worldcom, Kenneth Lay and Jeffrey Skilling at Enron, Dennis Kozlowski at Tyco International and John Rigas at Adelphia Communications, are among the best known.

Their collective, awe-inspiring appetite for inventing phantom profits and misleading the financial markets left investors considerably poorer and, tragically, tens of thousands of former employees with pension funds that contained, well … no funds.

Serious remedial action was required to stop a repeat.  Sheriff Sarbanes and Inspector Oxley rode into town to clean up the mess.  Between them, they gave birth to the Public Company Accounting Reform and Investor Protection Act, more commonly known as the Sarbanes-Oxley act, in 2002.  Henceforth, any corporation with a stock exchange listing in the US has to comply with transparency in their corporate disclosures or fall foul of the US Constitution and the Federal Government.

In other words, businesses have to ‘tell the truth, the whole truth and nothing but the truth’ about how their businesses are faring.  George Dubya Bush, then US President, said of the new regulations at the time: “The era of low standards and false profits is over.  No boardroom in America is above or beyond the law.”

Honest businesses moaned about the added costs such oversight would incur but eventually, Sarbox became a part of US corporate culture.  Companies based in other jurisdictions with secondary listings on the NYSE or Nasdaq carry the same obligations, while other countries have since adopted similar regulations.

I was musing on the usefulness of this new era of corporate transparency while watching Inside Job over the Christmas holidays.  How, I wondered, was it possible for the US, and then the global financial markets, to collapse so spectacularly in 2008 if transparency and corporate honesty are now standard practice?  Over a cold beverage with a number of communications-type chums recently, we discussed the role and responsibility that the communications department has when it comes to discharging such obligations.

It was a small group and therefore not necessarily statistically valid but we all agreed – getting a standard press release signed off is more of a palaver than it used to be, while getting legal approval for the annual report has become a theatrical production that could challenge the expertise of Cameron Mackintosh.  This is reassuring.

But we also agreed that we deal in much more than press releases and annual reports.  In fact, combined, releases and annual reports make up a very small proportion of the collateral we produce or get involved with.  What about one off press briefings, or by-lined articles or conference speeches?  It seems the process also cares little about corporate blogs, sales presentations or tweets too.

Yes. I know it’s not practical for every single piece of communications collateral go through an end-to-end approval and sign off. Otherwise, our work would never see the light of day.   But can you imagine a situation where, every once in a while, we’re holding, or could we be seen to be holding, a corporate exposure in our hands?  Have you considered it?

If so, does the idea cause you mild heartburn too?