Too Much Information?

Prior to the recent news that Glencore’s initial public offering is likely to mint six new billionaires, the Swiss-based firm was primarily known for three things: It is the world’s largest commodities trader. Its founder is Marc Rich, the notorious “fugitive financier” who was pardoned by President Bill Clinton in 2001. And it’s famous for guarding its secrets.

In order to go public, however, Glencore has had to abandon some of its secrecy. Last week, it released a 1600-plus-page prospectus. That’s longer than War and Peace, and with no Prince Andrei.

But is Glencore’s massive disclosure really understandable? “The more you read, the more you are left with a sense that the company may have confused volume with clarity,” William Wright wrote in Financial News. “Glencore may be a complex company, but does it really have to be so complicated to work out what makes it tick?”

To us, the whole display is a good reminder that if information is to be useful, it needs to be kept simple—a principle that holds whether you’re shooting for market transparency or trying to effectively run your organization.

“Complicated controls do not work,” Peter Drucker wrote in Management: Tasks, Responsibilities, Practices. “They confuse.” Drucker recounted meeting a bank executive who ran every idea for controlling an activity by his two teenaged daughters. “Only when I had it so simple that they could explain back to me what the procedure was intended to accomplish and how, did I go ahead,” the banker told Drucker. “Only then was it simple enough.”

[EXPAND More]Similarly, clarity of expression is essential. “Even John Maynard Keynes tried hard to make his economics accessible,” observed Drucker in Managing in a Time of Great Change. “At whatever level, knowledge people must make themselves understood.” Ideally, with brevity.

As any experienced Washington journalist can tell you, a classic way the government tries to elude a Freedom of Information Act request is by complying—with extreme generosity. Instead of offering up 100 useful pages, it provides 40 boxes stuffed full of files. All that needle-in-a-haystack searching is enough to put off even the most tenacious reporter.

What do you think Glencore’s motivation is in releasing a 1,637-page prospectus—to really provide clarity or to hide and confuse things?[/EXPAND]