Do you have the right business communication skills?
How businesses communicate has been brought to the forefront in recent years as the desire for transparency increases - but are you equipped with the right communication skills?
It was recently revealed that the Bank of England had fined The Bank of Tokyo-Mitsubishi UFJ over ‘poor communication’ when they did not tell BoE about an enforcement action.
The Prudential Regulation Authority declared that Mitsubishi UFJ (MUFJ) had failed “to be open and cooperative with the watchdog”, and fined them £26.77 million.
"We expect all firms to be open and straightforward in their dealings with the PRA. Where firms fall short of this expectation, we will enforce it," Sam Woods, BoE deputy governor and PRA chief executive, said in a statement on Thursday.
As a result, MUFJ announced that they would improve information controls and intra-group communication on regulatory matters.
Grant Thornton have also added to the debate by exploring the correct ways in which companies should communicate with external parties.
Martin Kneale, their Isle of Man director said: “Corporate information is becoming more opaque and difficult to comprehend due to the sheer volume of information being released. Clear communication is essential and that should not be forgotten in the bid to become more transparent.
The key to effective transparency is to strike a balance between holding back vital information and swamping investors with too much detail.
“This phenomenon is not confined to the US. Research by Grant Thornton on the FTSE 350 shows that the average annual report comes in at 300,000 words, half of which is typically historical financial data.
“It illustrates that companies are struggling to apply the materiality concept, the accounting principle that says trivial matters are to be disregarded and important matters are to be disclosed.
“Greater transparency usually just means more volume. The key to effective transparency is to strike a balance between holding back vital information and swamping investors with too much detail.
“Providing a huge bank of data effectively says “Here it is – now get on with it”. This isn’t the way you would treat customers so why treat investors like this?”
But what is good communication?
The ability to present engaging and influencing information, as well as improving listening skills is essential for any individual or business to succeed – if your message can’t be discerned amongst a jumble of words, then it will not hit home, just as withholding information can ruin a reputation or relationship. It may even result in large fines!
The key attributes of any great business report are:
- Clarity – anyone should be able to understand your main points.
- Concise – overwriting hides essential information within a mire of words.
- Correct – withholding information or stretching the truth can open a business up to fines and regulatory consequences, not to mention diminishing trust in the business.
- Cause – do you understand the purpose of the report? This should form the basis of your report structure and restrict the opportunity to deviate into a verbose territory.
How can I learn these skills?
ICAS offers a range of Professional Development resources, including in-house and external training courses and online learning to provide a range of professional and business skills.