Every little bit of information helps
The abiding principle of financial communications, as policed by the Financial Conduct Authority (FCA), is that all shareholders should receive price sensitive information at the same time. That’s why UK-listed companies are required to disclose relevant updates via the London Stock Exchange’s Regulatory News Service (RNS).
An abiding principle of employee communications is that if there is bad news about your organisation, you should share it as quickly as possible to avoid rumour and misinformation.
Tesco, Britain’s largest private sector employer and one of the UK’s biggest companies, appears to have ignored both by not announcing its plan to close its fresh food counters with the potential loss of 9000 jobs until the early afternoon today (Monday). Even then there was no RNS.
The news broke in The Mail on Sunday. Having worked both on Sunday newspapers and for companies targeted by Sunday newspaper, I would reckon the MoS contacted Tesco any time between 7pm on Friday night and about 3pm on Saturday. Most likely the call went in around 10am on Saturday.
At that point Tesco would have called its financial and corporate PR agency Teneo to discuss what to do. Whether or not they confirmed to the MoS or responded to the flood of enquiries on Sunday (I'd've gone with “no comment”), I would have advised moving heaven and earth to put out an announcement first thing Monday morning.
1: This is clearly price-sensitive information and the shareholders need to know. If the investors are not up in arms with Tesco about failing to disclose key information, the FCA should investigate. What is the point of RNS if one of the country’s major listed corporations doesn’t use it? Tesco’s brokers Citigroup are there to point this out and police the process.
2: The level of uncertainty among Tesco’s 440,000 staff caused by this speculation is massive. I leave it to true employee engagement experts to say how they would communicate but when I worked at Barclays, which at the time employed a mere 120,000 people, an RNS or press release tended to be the best way of getting to as many employees as possible.
Finally, the headline of the statement “Building a simpler, more sustainable business” betrays the marketing background of the CEO Dave Lewis. At times when you are dealing with people losing their jobs, you need to wind in the spin and be much more sensitive.