x Abu Dhabi, UAESunday 21 January 2018

Why revelation is more valuable than transparency

I cannot remember which illustrious journalist said it, but it went like this: "News is what somebody, somewhere does not want you to publish. All the rest is public relations."

I cannot remember which illustrious journalist said it, but it went like this: "News is what somebody, somewhere does not want you to publish. All the rest is public relations." I remembered this aphorism last week during the growing calls for greater transparency in the affairs of Dubai World, the emirate's former flagship company now locked in negotiations with its bankers over US$22 billion (Dh80.8bn) of outstanding loans.

Suddenly everybody, it seemed, was clamouring for greater disclosure by Dubai World of the progress of those talks. Lord Mandelson, the British business minister, was joined by Neal Wolin, the deputy secretary of the US treasury, in demanding more openness. The Financial Times added to the crescendo with a thundering leader entitled "The Murky Gulf". Even the usually-restrained IMF got in on the act towards the end of the week. Surely, if such eminent people and organisations are demanding it, it must be a good thing.

From the point of view of a business journalist working in the sometimes publicity-shy UAE, it seems a no-brainer to support demands for greater clarity and openness on such an important issue. Stakeholders in the company are surely entitled to regular information on a situation that affects the lives of everybody in the UAE, the Gulf and in global financial markets. And on such an important issue, we are all stakeholders in some form or other.

To have a more transparent process would also be a welcome breath of fresh air in a corporate culture where the prevailing attitude is, "my business is my business and not your business", in the words of a shrewd observer of Dubai financial affairs with whom I discussed the issue last week. But, in a bout of contrarian thinking, I began to question whether transparency, per se, is such a desirable thing.

The answer is no, most definitely not, in some cases. We all value privacy and the sanctity of our private lives, for example. Nobody would want their bank manager to publicise details of their private financial affairs. There are many other situations where privacy, the opposite of transparency, is valued above openness. In a media context too, there are times when disclosure is not always the best thing. The editor of The New York Times, Bill Keller, explained last week how his newspaper delayed breaking news of the arrest of an important Taliban operative in Pakistan, on the request of the US government, because the man's colleagues did not know he had been arrested and might run for cover if they did. You might call this enlightened self-censorship.

In business journalism, there have been many instances where disclosure has not always been the best policy. A newspaper gets wind of a big corporate takeover and splashes the business section with the story. The deal falls apart as a result of this premature transparency. Last week, there were contrasting instances of transparency with regard to Dubai World. Early in the week, there was a story that the company was going to offer some 60 cents on the dollar to its creditors in a long-term deal to resolve its financial problems.

Later, and at least partly in reaction to that revelation, which was denied by the Dubai authorities, a series of briefings were organised with news agencies and the international press. The top line that came out of those briefings was that Dubai World would be ready to put a plan to creditors by the end of March, well ahead of the previous deadline a month later. Great news, you might think. Rather than being stuck in a negotiating rut with creditors, real progress was being made in the talks, so much so that Dubai World would comfortably beat its original deadline.

But is that necessarily such a good thing? In the complex and tortuous chicanery that accompanies restructuring talks, Dubai World now has another millstone around its neck a new deadline of March 31. What if the company's advisers feel so pressured to come up with a deal over the next five weeks that they conclude a half-baked and second-rate deal? What if the extra month would have made all the difference in achieving the best possible deal for all concerned?

Do not get me wrong. I do not want Dubai World to clam up. I am not requesting less transparency, rather a different kind of transparency. The word has become another item on the box-tickers' schedule, like corporate-governance and environmental-awareness. The argument is that if you brief the press, regardless of what you say, you have satisfied the transparency criteria. What is really needed is more revelation, like, possibly, the 60 cents story, and less rule-book transparency. In other words, more of what they don't want you to publish.