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Why the media get business wrong

Journalists spend far too much time telling everyone about the listed corporate sector and not the unlisted sector. They are missing out and the public is as well.

Scientists often lament the media’s coverage of their world.

Cancer research, climate change and weather projections are reported on almost daily by the media. Much of it is responsible coverage, informing the public objectively with attention to detail. Nevertheless, a sizeable amount isn’t. Instead, the coverage relies on attention-grabbing headlines, and scant concern for facts and detail. Headlines like “breakthrough in breast cancer drug” and “the UK is forecasted to have the coldest winter on record” are not unusual.

The media’s coverage of the business world isn’t much better, but for a different reason. Yes, the business media is often just as guilty of writing sensational headlines and giving undue attention to certain details as their science counterparts. But there is a much bigger problem for the media’s coverage of business – they ignore most of it.

Here’s why. In the US, there are at least 24 million bona fide companies in existence, and out of this huge number only 8,000 are listed on stock exchanges – that’s less than 0.04%. And that’s a percentage likely to be the same in much of the rest of the stock market world.

In itself, that’s no big deal. Listed and non-listed firms can co-exist happily together without difficulties. But the trouble comes from the coverage of the two parts of the corporate world by the media. Journalists spend far too much time telling everyone about the listed sector and not the unlisted sector.

Granted, much of the listed part of the corporate world represents the biggest companies and, because they are listed, they disclose much more information about themselves. This of course translates into more interest. But does it merit the media’s pretty much blanket coverage of the listed sector, with little or no coverage of the much bigger non-listed corporate world? A reasonable response would be probably not.

Family businesses are very pertinent in the non-listed sector. Out of the top 200 family businesses in Europe and the US, at least 60% are non-listed. Many of these are huge companies like German-based Schwarz Group and Haniel that had respective revenues of €64 billion and €27.8 billion last year. In France, there’s Sonepar, with 2011 revenues of nearly €15 billion. Across the Atlantic, there are firms like Tyson Foods with revenues of around $30 billion (€23.89 billion) and Cox Enterprises with revenues of $15 billion.

But how many people have heard of any of these companies? Again, a reasonable response would be few. That’s despite the fact that individually, all these firms have larger revenues than the recently listed Facebook and employ many more people than the tech company. But the media frenzy around Facebook has been extraordinary.

Of course, many of these non-listed companies like the fact that the media doesn’t write about them. Many like being secretive and block journalists’ enquires. But most don’t even have to be secretive because journalists don’t bother trying to find out information about them in the first place. That’s because finding information about non-listed companies is more difficult than it is for listed companies.

But if the corporate world is to be better understood and appreciated by the public – after all many non-listed companies are into long-term capital preservation and planning, which is good for jobs and promotes responsible capitalism – much more needs to be written about the unquoted sector.

That’s the responsibility of business journalists, but it is also the responsibility of the businesses themselves, which need to encourage more transparency. And that adds up to a healthier corporate sector for all.

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