Monday, May 01, 2006

Keeping a Secret 

We finished a major announcement on Friday that was covered in the national media. It had been a secret, but not by much. Reporters were sniffing and more than one had caught wind of the story and even the substance of it. In the last hours before it broke we were on edge about whether it would leak or not.

The problem was that too many people at the client knew about it and despite SEC materiality and admonitions to remain silent, people talk. Perhaps they can't help themselves. Perhaps they think it is OK to mention it to their wives or just one friend. Perhaps there is an effort to derail the announcement by leaking it early. Perhaps they never realized they leaked. There are as many reasons for why one fails to keep silent as there are people.

This is why there are rules for how to handle secrets. Rule 1: Tell only those who have to know. Rule 2: Announce quickly. Even those who must be insiders have a tendency to talk, sometimes inadvertently. They are not trained to keep secrets so they don't know how to watch what they say. They think they are being cautious but in a passing moment they mention something that provides a clue -- or gives away -- the substance of the information.

I often wonder how governments keep secrets. Politicians and their staffs are born talkers. They hate the notion that they aren't in the know and they need to show off what they know, or (Repeat here all the reasons above.)

Were it not for materiality and a requirement to remain secret, it is less strain to be open.


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