When asked about the main risks to their organization that they must manage, leaders of large corporations, regardless of the industry, almost always name their single most important asset: their reputation.
Benjamin Franklin observed it takes many good deeds to build a reputation and only one bad one to lose it.
Meanwhile, offshore financial centers appear to be facing an endless string of bad deeds and an image that devolves from shady to dodgy to criminal, depending on the level of media interest.
Positive mentions of offshore financial centers are almost nonexistent. In fact, we are hard pressed to name a single one.
Is it possible the financial services industry in Cayman, and in other offshore financial jurisdictions, has simply given up, perhaps thinking their public relations challenge is insurmountable?
(We except from that observation Cayman’s one-man public relations maelstrom Anthony Travers, who tirelessly, and continuously, defends these islands and the offshore industry, in general. Following the release of the “Panama Papers,” while Cayman was largely silent, Travers’s voice was heard on BBC radio and far-reaching CNBC. He also penned and got published letters to newspaper editors, including the influential Financial Times.)
Two days after the “Panama Papers” story broke internationally, Cayman Finance sent out a statement. Being in the communications business ourselves, we can state with authority that in today’s nearly instant news cycles, two days is an eternity.
A day later, the IFC Forum, a lobbying group for offshore law firms, finally gave birth to a statement, proclaiming not all international financial centers are the same, and the ones in the British territories are better and more transparent than the rest. Ho-hum.
In sum, our message has been: We are not Panama. We are not secretive. We are not a tax haven. And, most puzzling to outside observers, we are not offshore.
The latest fashion, among the government and financial services crowd, of “renaming” offshore financial centers “small international financial centers” is a nonstarter. It is playing, and not very successfully, with euphemisms. We must ask ourselves this question: Are we ashamed or embarrassed about the very industry – offshore finance – that contributes more than half of the revenue to the Cayman Islands treasury?
Why are the stories not being told of offshore centers facilitating international trade, reducing complexity in international mergers and acquisitions, channeling cross-border investments, holding cash for large corporations as safe havens, helping companies in the developing world access the capital markets, eliminating double taxation for fund investors, enabling financial structures fit for a globalized economy and ensuring that corporations remain competitive and as a result secure jobs onshore?
If the offshore industry cannot confidently articulate why it is important in the global economy and ultimately to onshore economies, others, such as the Tax Justice Network, Global Witness or Oxfam, will happily fill the void with sometimes hair-raising “research” and tell the world why offshore is corrupt and criminal, if not downright immoral.
The reality is that Cayman is, and historically has been, amateurishly inept in telling its own story. Politicians, public relations “professionals,” and industry practitioners routinely issue such sanitized, anodyne “statements” that, to any serious editor, they are virtually worthless.
Instead of protecting their reputation by establishing proper media relations, the government and financial services firms in the offshore space have ceded the media coverage almost entirely to hostile activist groups.
Let us close with this question: Is there anyone on this island in government, in public relations, or in the financial services industry who can even name, or is on a first-name basis with, the editor of the Wall Street Journal, The Economist, or the financial editor of The New York Times or The Washington Post?
We did not think so.