Welcome to Season 3 of How to Cover Money, presented by The Reynolds Center. This new season brings a new host, Megan Calcote, program coordinator for the Reynolds Center. This week’s episode features Christopher Waddell, an associate professor at the School of Journalism and Communication at Carleton University in Ottawa, Ontario Canada, and his tips for business journalists. His tips were presented at the 2015 Canadian Association of Journalists conference.
Transcript
[Intro music]
Megan Calcote: How to Cover Money: Everyone’s a business journalist.
Christopher Waddell: Don’t reach your conclusions until you’ve done the research and talk to people. Don’t go knowing the answer before you ask the questions.
Calcote: Hello and welcome to the Reynolds Center podcast. We’re coming to you from the Donald W. Reynolds National Center for Business Journalism. We are based at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University. I’m Megan Calcote, program coordinator for the Reynolds Center, and today we’re bringing you the first episode of our podcast for the new year, and we are glad to be back. If you’ve listened to earlier episodes of our show, you’ll notice that I’m a new host. If you’re wondering where our previous hosts, Micki Maynard and Mark Remillard went, they’ve moved on to some exciting opportunities. Micki is now at WBUR in Boston, where she is the senior editor for Here and Now, and Mark is now at ABC News Radio in New York. So hello to all of you listeners. I’m excited to be hosting the show.
In addition to changing hosts, we’re also going to change the podcast schedule just a bit. Instead of breaking up the show into different series throughout the year, we’re going to bring you new episodes every other week, on Fridays. As these new episodes come out, we’d love to hear what you think about the changes, or just the podcasts in general. Send us your feedback by sending an email to businessjournalism@businessjournalism.org. And if you have an idea for a topic you’d like to see us cover on the podcast, please let us know.
This week, we’re bringing you tips from Christopher Waddell, associate professor at the School of Journalism and Communication at Carleton University in Ottawa, Ontario, Canada. We were fortunate to meet Chris last year when he presented a Reynolds Center session at the Canadian Association of Journalists conference. His session covered the basics of business journalism, and today we’re sharing some of the excellent tips he presented during that session. For those of you who are in the states like me, a lot of these tips are just as helpful here in the U.S. as they are in Canada. Chris gave some great insight into what drives a good business journalism story
Waddell: Business stories come down to two things: They come down to people, and they come down to money. And people make the decisions that make them lose money for the corporation. The connections between the people are really important to understand as a business journalist. The things that people do in business are inherently interesting in lots of ways, and they make great stories. Most of the time they’re interesting because they involve people taking risks. Some with their own money, some with other people’s money, but taking chances on doing different things. And doing stories about risk is really it’s an interesting thing to do. But you need to know and understand both the numbers and the people. So do your research before you do your interviews. If you know all that stuff before you go and do your interview, you’re going to be in a much better position when you’re interviewing someone at a company, or someone that knows about a company, because you will know when they kind of pull the wool over your eyes. You know when you find the truth. Business people will put a favorable glass on most things, so you need to be able to challenge and question that. But there are lots of people you can go to to get information, to help.
Calcote: And doing that homework Chris talks about, involves reading everything you can get your hands on about the companies you’re covering. Quarterly reports can be a great place for you to learn more about companies, but there are also great places to get story ideas. If you need help, there are resources to point you in the right direction.
Waddell: Business in Canada is a really small world, people know each other, and the connections they make between each other are really important.
Calcote: If you can start to understand some of those connections in the business world, you can develop your own network of sources who can provide compelling information for your stories. As you’re getting started in covering business, it’s important to know the differences between private and publicly traded companies and what kind of information each type of company is required to disclose.
Waddell: What I’m going to talk about are the two types of companies that are out there. One is a private company. Those are companies whose shares are not traded on any stock exchange, and there’s minimal disclosure requirements, so you can’t find out an awful lot about the financial performance and the financial results of private companies. The other one, the one that most business journalists and most journalists tend to focus on, are publicly traded companies whose shares are traded on stock markets in Canada or the United States or other places around the world. And they are required to make regular disclosures of their financial results on a quarterly basis. So you can find out the financial results of any publicly traded company going back a long period of time, and that can tell you a lot about the company. They’re also required by stock exchanges and securities regulators to disclose things called material facts. So it’s anything that might have an impact on the shares of the company, or anything that might lead you as an individual investor to think about buying and selling the shares the company, they’re required to disclose as material fact. Now, there’s some very interesting parameters around that. Certainly during the time, for instance, Steve Jobs was ill before he died at Apple. There were big battles about what Apple had to disclose about his health, because obviously his health is a determinant. If you’re a shareholder in Apple, you might be kind of concerned about, is Mr. Jobs going to live? Isn’t he going to live, and how long is he going to live? So it can be lots of things from what the company actually does, and financial results, things it’s thinking about, and even the health of some of its senior executives can be part of the material facts that have to be disclosed.
Calcote: So as a business reporter, you’re probably going to be covering a lot of publicly traded companies. Knowing who the key players are within those organizations is key, as you’re about to hear from Chris, the board of directors is a great place to start.
Waddell: At the very top is the board of directors. And the Board of Directors, they represent the shareholders and that they’re responsible for the strategic direction and the overall management of the company. They’re not the day-to-day people who are deciding what we do on a daily basis. They’re the people who are providing out the long-term strategy. They’ll meet quarterly, they may meet monthly, and the management of the company reports to them. Great attention has been paid to the board, much more than ever used to be paid to the board. So you as journalists should be looking at the board as well and seeing what the board is actually doing. Three of their big jobs are to run an audit, which is to oversee the financial results of it and ensure that the financial results of the company are stated fairly and accurately. They run a nominating committee, which is to nominate new members of the board, because there are replacements the board every once in a while. They also are the people who decide how much the Chief Executive Officer is getting paid. So if you’re not happy that your company, you are following a company and it’s performing poorly, yet, the chief executive officer is getting paid $50 million a year. The people you should be talking to, and the people you should be unhappy with is the board of directors. Cause they’re the people who are setting his or her compensation. The board of directors are there to protect your interest as shareholders and and if companies not doing well, they’re the people the shareholders should be asking, “what’s actually happening? What’s going on?” They hire and fire the Chief Executive Officer, so the CEO of the company reports to the Board of Directors.
Often, the board of directors will contain several people who are managers of the company. It might be the Chief Executive Officer, it might be the Chief Financial Officer or the Vice President of Finance, two or three usually. But a lot of the boards should be made up of independent directors, people who don’t have a connection or affiliation with the company, and that’s taken on added importance in the wake of the high-tech crashes and the changes in U.S. legislation. So I’ve learned, obviously, in the U.S. and more recently, another set that are making more and more requirements on the board to actually exercise their oversight. Good companies have a good independent board of directors. When Conrad Black ran into problems with, one of the problems a lot of people noted that many people on the board seemed to be friends with Mr. Black. And rather than people who were there because they understood the geographic region the company was working in, understood the company’s industry, understood the company’s suppliers, or all those, or the bankers, all those sorts of things.
Calcote: Knowing and understanding the makeup of a board of directors is critical when covering business. And when journalists put scrutiny on boards of directors, it can lead to changes in business practices.
Waddell: Globalmail, about a decade ago, started a series in the fall every year called Board Games, where they started to look at boards of directors, and it had a significant impact on changing practices of boards of directors. They looked at things like, how much our board members paid? They started to ask companies, how many meetings did they attend? Do they attend all the meetings? Don’t they attend all the meetings? The other question they started to ask was, how many are independent? How many are actually linked in one way to the company, because it’s the brother-in-law to the guy who’s the CEO. They also started to ask, how many shares do the members of the board actually have in the company that they’re on the board of? And in fact, what we saw, in a lot of cases, was people were on boards of directors of companies, but they had very few shares in the company. So in other words, they’re supposed to be representing the interests of shareholders generally, but they don’t have many shares themselves, so the pressure came to actually disclose more of that and make more of that publicly available.
Calcote: So don’t be afraid to start asking questions of the boards of directors for the companies you’re covering. It might lead to some fascinating reporting. Aside from the board of directors, it’s important to familiarize yourself with the people involved in the day-to-day management of a company.
Waddell: Below the board is the actual management of the company. Those are the people who are running the company on a daily basis. And how a company is structured tells you a lot about what a company’s priorities are. If you can get an organizational chart, that was a really good thing to look at and see, because it tells you who reports to whom, and it also tells you, if you’re a journalist interested in finding out about the company, who the most likely person or the most likely part of the company would be to go to to try to find that out. The key people in management you want to find out about and see who they are would be the Chief Executive Officer, who would be the person at the very top of the company. Sometimes a company has a Chief Executive Officer and a Chief Operating Officer who are different. Not necessarily, lots of companies don’t, and some companies just call on the president. But the Chief Operating Officer, for instance if you were a car company or something like that, you might have Chief Executive Officer who would be in charge of all of General Motors, but you might have a Chief Operating Officer who would be in charge of the plants that are producing the cars on a daily basis. So operating as it suggests, doing whatever the company actually does. And then Vice President of Finance is very important, because he or she is the person who actually is aware of what the company’s financial situation is. He or she is the person who’s responsible for all the filings of information that they have to file to stock exchanges, and also they’re the person in charge of raising money for the company, which is important to selling shares, borrowing money, issuing bonds, whatever they might do. So that’s a key person in any company, and that person has an awful lot of responsibility. The operating vice presidents are important because that then tells you what the company thinks is important. And finally, for a journalists point of view, whoever’s in charge of the communications for the company is important.
Calcote: One of the things Chris talked about during the session at CAJ was how the titles of those vice presidents can tell you about a company’s priorities. So for example, if you look at an oil company, do they have a vice president of environmental issues? Or maybe a vice president of exploration? Those titles can tell you a lot about what a company thinks is important, so pay attention to those titles when you’re covering a new company. Finally, Chris shared a piece of advice that any good journalist should follow, whether you’re covering business or not.
Waddell: Don’t reach your conclusions until you’ve done the research and talk to people. Don’t go knowing the answer before you ask the questions. Go and find out what the questions are, and then see where that takes you and so what the answers might be.
Calcote: So that does it for this episode of the How to Cover Money podcast. Thank you Chris Waddell for presenting this session at the Canadian Association of Journalists conference, and thank you to our friends at CAJ for making us a part of their conference. If you’re a Canadian journalist, I recommend visiting caj.ca to find out more about this great organization. If you enjoyed this podcast and would like to know where you can find more training resources from the Reynolds Center, visit businessjournalism.org. You can access our business journalism self-guided training. Download our free ebook, Guide to Business Beat Basics, or sign up for our monthly newsletter. Signing up for the newsletter will help you stay up to date on all the news and training opportunities from the Reynolds Center throughout the year.
Speaking of which, we have a few opportunities you might want to take advantage of. If you’re interested in learning about emerging virtual reality technologies and how you can use VR to tell compelling stories, we’re hosting a webinar with our friends at Media Shift called “Storytelling with Virtual Reality.” The webinar will be presented by Retha Hill, the director of the New Media Innovation and Entrepreneurship Lab here at the Walter Cronkite School, and Shannon Perkins, the founder of Adventure VRoger, a VR project integrating film and gaming in large scale storytelling. To sign up or to learn more, visit businessjournalism.org. If you’re listening to the podcast after the webinar took place, a replay is available online on demand. The Reynolds Center is also going to be at the NYCAR conference this year. Cronkite School professor and investigative journalist Steve Doig will be presenting a pre-conference workshop titled 10 great business databases to mine for stories. You can register for that session on the investigative reporters and editors website ire.org or by visiting businessjournalism.org.
If you’re unable to attend, or if you’re hearing this after the fact, you can catch up on Steve’s tips by visiting businessjournalism.org or you’re subscribed to the How to Cover Money podcast. You can subscribe on iTunes, Stitcher, or SoundCloud for free. If you’ve enjoyed this podcast, please leave us a rating or review on iTunes or Stitcher. Your ratings help make this podcast more visible to other business journalists who might benefit from the tips we’ve shared today. We’ll be back in two weeks with another episode of the How to Cover Money podcast. We’ll be bringing you tips for finding data from data journalist, Steve Doig and Evan Wyloge. Thank you for listening.
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