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March 12, 2009

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Sending a memo like that one has the effect of turning all employees into insiders for stock trading purposes. If the same information wasn't previously disclosed publicly, like via Dow Jones and Reuter's, then the company faces very serious trouble.

That's exactly right, Glynn, and I wondered why Edelman didn't make that disclaimer about this specific practice, before going on to make what really was a legitimate point about it being good general practice to make employees credible (and reasonably accurate) sources of information for anybody who cares about the company. Right?

What about the fact that you are placing trust in all of your employees to know the difference when something can be shared and something cannot? There are already way too many instances where media gets information from an undisclosed source, and the company has to go into crisis communication mode to ensure that facts are corrected, etc.

Well, I think this issue must be evaluated case-by-case. But in general, I think you ought to trust employees with--and verse them in--at least as much financial, strategic and market information and analysis as you give to analysts.

So that when a reporter or an analyst or a potential investor inevitably DOES ask the Citibank accounts payable person, "Do you really think things are on the rebound there?" the person answers in more detail than, "Dunno."

The alternative is the old cartoon that shows two guys turning a pole that disappears into a hole in the ceiling. One guy says to the other, "I think they got a merry-go-round up there."

Whenever I see the word "memo," my messed up brain sees "nemo." Do you think that means I should get a clown fish?? I have one in my Happy Aquarium Facebook fish tank.

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