This week in my pr writing class we’re learning how to write a letter to shareholders. The hard part is that we’ve been assigned to write it for a company who’s been in some deep and muddy waters in the past few years. Sales are still up, but their costs have skyrocketed beyond thunderdome due to goodwill impairment and other bad-businees charges. I’m wondering what kind of attitude is appropriate for writing to your sharholders and explaining that they’re in the hole by $28 Million. I decided to look at some examples.
In class we looked at Gap’s annual report, which used a fairly straight forward tone to explain its mistakes and failures during the year. I though the writer’s decision to not “beat around the bush” was a good one, and his or her letter to the sharholders left a lot of hope for the future.
Although Gap’s report was a good example, I was looking for a letter from a company who had really screwed up big time. I found a good case in American Electric Power (AEP). In October AEP, one of the country’s biggest electric utilities companies, agreed to spend $4.6 Billion to make upgrades on six of its coal-fired power plants, which will significantly reduce harmful emissions. The agreement ended an eight year legal battle over violations of the Clean Air Act. According to the Environmental News Service, this is the largest environmental settlement in U.S. history. The original suit filed in 1999 alleged that AEP made unpermitted changes to nine of its plants, which increased emissions that cause smog and acid rain.
AEP’s largest power plant, Amos in West Virginia, is covered by the settlement. (Photo by Tim Smith courtesy of U.S. Army Corps of Engineers and Environmental News Wire)
As an aspiring pr person I’d really like to know how they talked themselves out of this one. I mean, obviously they didnt get away with anything – they’re paying big bucks – but they had to have some kind of explanation. Some news releases from the time the suit was filed quote Dale Haydlauff, AEP’ vidce president of environmental affairs saying:
“We continue to be amazed that Northeast states insist on blaming their local environmental problems on sources that are — in Vermont´s case — 750 to 900 miles away. The Vermont attorney general told the media that our plants have not invested in modern pollution control equipment. He´s wrong.”
“Let´s look at the facts. In the last eight years alone, AEP has spent more than $1 billion installing equipment to reduce sulfur dioxide and nitrogen oxide emissions to address acid rain concerns and meet Clean Air Act requirements.”
“This lawsuit is just another political effort to ignore scientific facts and lay the blame for air quality problems in densely populated, traffic-clogged cities like New York City on someone else,” Heydlauff said. “This action is totally without merit and we believe we will prevail should this lawsuit reach trial.”
(complemets of AEP newsroom archives)
The most relevant annual reports I could find on AEP’s investors’ Web site were from 2000 and 2006. In the sections where the writer adresses the organization’s environmental impact and effort, I found the attitude and tone to be striaght forward, but not too blunt. Unlike the defensive tone employed by Haydlauff, the tone of these parts was matter-of-fact and very detailed in explaining what actions AEP has taken and is taking to offset its harmful greenhouse gas emissions. I have no doubt that AEP investors were reassured by all of the programs and activities that AEP is and has been participating in. The letters I read did not specify any litigation surrounding the corporation’s alleged violations. They were clearly and purely AEP’s side of the story. I am curious to read the letters from 1999 and 2007, and even more curious as to why they are not on the Web site.
In conclusion, I think these letters were a good example of an – in my mind innocent – company’s reaction to negative press and litigation. I now have a better stand point to look at my assignment from, and a good idea of writing style that I may mirror.
