Look for plots and subplots

Journalists sometimes get caught up in the daily minutia of business reporting, and forget that some of the best stories involve people and relationships. As the family feuds detailed in Chapter 4 show, many corporate governance stories are about brother pitted against brother, stepchildren fighting with second wives and infighting among heirs and would-be heirs.

Staying on top of court filings is one way to discover such stories, and sometimes contain details that allow journalists to delve deeply into family relationships. Macau gambling kingpin Stanley Ho’s several wives and children fought most of their battles over ownership of his empire in the courts, revealing juicy details in the supposedly dull filings.

Getting Your Corporate Governance Story on the Front Page

It’s the reporter’s job not only to dig up stories, but to “sell” them to the editor, and convince the editor that the story deserves prominent play. In the end, the story you pitch must be news. Most journalists agree that the following eight elements grab editors’ attention, and more important, attract readers:

Immediacy: Did board decision or company action occur today, or is it scheduled?

Proximity: How will the corporate governance matter affect the community, region or country? If companies are poorly governed generally in a country, can the economy grow in a sustainable manner over the long term?

Prominence: Is the chairman, CEO, or board director well known?

Oddity: Did the board approve purchasing a beach resort when its business is computer manufacturing?

Conflict: Is there dissension among the board directors, investors, other stakeholders, the government or senior management?

Suspense: Is there a deadline, for example, by which the company must prove that it is fiscally solvent to obtain new loans to stay in business?

Emotions: This news element — commonly called human interest — involves stories that stir our recognition of basic human needs, both psychological and physical.

Consequence: If conflicts of interest have led the board and senior management to make bad decisions, can the company stay in business? Are investors and markets adequately informed about those conflicts, and have they priced the consequences into the company’s share value?

— Source: “Business Reporting Beyond Numbers: Looking for the Good, the Bad and the Ugly in Corporate Governance” Global Corporate Governance Forum. http://bit.ly/I9LEmZ

Portfolio managers, investors and analysts can also be excellent sources. Hedge-fund managers and short sellers often provide insight into complicated financial maneuvers and accounting practices that may escape the average business reporter. Top union leaders, human resource consultants, corporate compensation experts and recruiting firms also can provide tips and expertise.