I wish there were more CEOs that understood their industry and business as well as you do, and could express it so well

Being CEO may equate to winning a popularity contest (or one in rhetorics), but I think it is out of question that someone like Schwartz gains immensely from their blogging. When you think about it, executives, senior government officials, celebrities and so forth live in a communicative bubble from which they can only get into contact with us through mediators (the traditional media). Many misconceptions about the greed and arrogance of the powerful come from what is interpreted as their aloofness – the lack of direct interaction they have with us.

Of course one needs communicative competence to begin with, otherwise a blog will hardly do any good. But I think a CEO who lacks people skills won’t last too long anyway – after all, that job is largely about people and those people will expect you to both have a plan and be able to verbalize it clearly and concisely.

I can see a few problems with allowing blogs to be considered compliant with Reg FD, but there may be ways around the problems. Here are some of the issues the come to mind:

1. How will investors know whether a blog is legitimately the CEO’s blog?

2. How can the CEO’s blog (which would perhaps be deemed Reg FD compliant) be distinguished from the software engineer’s personal blog that also addresses company issues?

3. Are RSS feeds reliable enough for journalists and serious investors?

4. What is the security of the blog? Could others access the CEO’s blog in some way and post messages there?

5. What if “false and misleading information” is posted in a blog? Who, besides the CEO, would have liability for the information? The audit committee might review 10-Qs prior to filing; it would have neither the time nor the inclination to review blog postings.

6. If the information is truly material, it seems that one way for the company to flag this is to make a filing on a Form 8-K. Otherwise, investors just have to guess about whether the information is material.

7. If CEOs take to blogging, they may have to give up one of the most attractive features of blogging — the ability to sort of think outloud in a candid manner. After all, an unguarded comment of the type that we bloggers make from time to time, could be career limiting.

All of these problems are either of a technical nature or related to how trustworthy blogging is as a new form of publishing. Of course, if you ask bloggers none of this is an issue, but from the perspective of the non-blogging part of the population – which still makes up the majority – things look different. Still, I can come up with a few arguments, even if it’s just from a layman’s point of view:

1. The security and verifiability of a blog is no different from that of a corporate web site in general.

2. The authorship of a blog can be verified by embedding it accordingly in the overall web site structure – if it’s located under “Company” – “Blogs” – “CEO’s blog” it is hardly plausible to assume it belongs to someone other than the CEO.

3. “False and misleading information” in a blog entry is no different from “false and misleading information” published in an interview or newspaper article (this doesn’t rule out the possibility that they might by treated differently in a legal context though).

4. Propagating information through RSS is arguably more effective than any other form of distribution. No, I don’t think that one sticks.

5. “Unguarded comments”, when made by politicians or corporate leaders, have the potential to be “career-limiting” whether they’re made at fund raisers, in interviews or posted in a blog.

Anyone with legal expertise (or without) want to pitch in?

These were the words used by Jonathan Schwartz, CEO of Sun Microsystems, in his first blog entry made a little over two years ago. The question that Schwartz raised seemed a little more daring two years ago than it does in 2006 – at first glance. After all, podcasting and vlogs have since then been added to the bag of online publication technologies and one could conclude that blogs are basically mainstream now.

Not in the corporate world.

Yes, there is a considerable level of new- and old-media hype about this new thing called corporate blogging. And yes, a new CRM-, product- or image-blog is launched almost daily by some major corporate player. But while PR departments from San Francisco to Sindelfingen seem to be at least curious and at best ecstatic, the men (and a few women) at the helms of the world’s largest and most profitable companies are rather quiet, a fact recently lamented by the New York Times. Some talk to their employees through an internal blog, but most prefer to pass the pen (or in this case the keyboard) to their ‘communication professionals’.

The question of course is why communication should not be at the top of the agenda for CEOs. When giving his reasons for starting his blog, Schwartz noted that he wanted to get unfiltered feedback from the community. Unfiltered, huh? If we suppose that the motive of Sun’s top dog is genuine (and his impressive track record as a blogger – at least in terms of how much he’s posted over the last two years – makes that seem plausible) it suggests that there’s a whole lot of filtering going on in old-world corporate communication. Of course blogging is not some magical wand you wave that makes such a communicative insulation magically dissapear. And it seems unlikely that many executives would even want that – after all, who really wants to listen the rants of disgruntled consumers and the diatribes of anonymous blog lurkers? But if Schwartz came to the realization that talking to people directly (whether that directness is real or just feels like it is) can actually be good for business, others will eventually follow, even if they are two years late and lack Schwartz’s dedication – a dedication that may well have to do with Sun’s problems as a company and Schwartz’s need to explain the massive restructuring he is undertaking to shareholders, employees and customers.

I’ll be looking at other blogging CEOs in the near future, and at why not just any executives should consider following the example of people like Schwartz and John Mackey.