Friend,

Last week CBA and Colonial First State agreed to pay $249 million to settle a class action alleging members' super cash earned too little interest while it sat with the bank. Note: “agreed to pay”, “without admitting liability”, “subject to Federal Court approval”.

This week, Australia’s most-searched phrase (50k+ searches), ahead of the US Open and the property downturn, was "commbank superannuation class action settlement".

I bet if you asked a lot of Australians now, they'd think CBA got fined or found guilty. Despite the fact it’s not true.

I watch search trends every week for this Brief and haven't ever seen this volume for a financial services brand.

I would suggest that banks’ trust accounts when it comes to super and wealth management was emptied long ago. No one is surprised by the issue.

But will a misnomer now be the permanent impression left about that matter? I guess that’s a risk CBA took eyes wide open because the alternative (eg being proven to have done the wrong thing) was worse.

What do we take from this? Settling a sum that large certainly makes a reasonable person think CBA / CFS did the wrong thing. It’s just not a proven fact that they did.

A fuct: a fact nobody has checked

That's what I call a fuct: something everyone treats as fact, but that hasn’t been proven.

Years ago we had a client call after hearing from an investigative journo rang who was holding a wad of the client’s CEO’s credit card statements, effectively alleging fraud. We all (and the Board) figured he’d done the wrong thing before anyone read the documents. When we dug into it was more a case of “not wrong, but not smart”. There was no misuse of company money.

The story went away, thanks in part to a smart colleague of mine treating the journo like an adult and reading the source documents.

So, a FUCT?

What matters here for you and I isn’t CBA. They have broad enough shoulders and deep enough pockets to carry another financial and reputational hit.

What matters for us is that when something nearly or seemingly true gets peddled as a fact, internally, it can be disastrous externally.

A fuct, repeated and believed internally, can be between the lines in a public statement by 1pm. And then you really are f*ct or at least off to a terrible start. Or even worse I’ve seen clients lose nasty multimillion dollar litigations to regulators because they got this wrong.

So what?

Run the three columns I’ve talked about before, before anyone speaks.

Column 1: Verified e.g. CBA agreed to pay

Column 2: Assumed e.g. wrongdoing

Column 3: Unknown e.g. court approval, who gets what, and when.

If your organisation ever settles anything, plan your communication for the verdict people will assume, not the one the court handed down. The crowd doesn't read orders; it reads the payment we might each get or how much we got stiffed.

It doesn’t always matter of you’re a consumer and you mistake a fuct for a fact. It matters a lot if you’re a CEO or Board member, or the management team defusing a reputational bomb.

Best,

Carden | she/her (here’s why that matters @work)

PS Hit reply and tell me: has your board ever tested what it "knows" against what's actually been verified? I'll send you the one-page F.E.L.T. card if you'd like the tool we use.

On our radar:

The other big stories this week

The winding road to Bathla’s riches leads to this decrepit unit block

Bathla's collapse has put the property holdings and financial affairs of founders Bhart Bhushan and Rajinder Mohan under scrutiny, as administrators work through more than $3.3 billion in debts and an extensive network of family-linked entities and assets. This collapse has left 2,500 under construction, a pipeline of 14,000 homes in doubt and creditors, subcontractors and lenders seeking transparency on Bathla's founders' wealth. 

‘Contagion risk’: Top central banker warns AI could spark global economic downturn

Andrew Bailey, governor of the Bank of England and chair of the Financial Stability Board, has warned of a severe downturn in the global stock market if the AI bubble bursts. He cautioned if the valuation of AI companies starts to plummet, this could trigger a sharp global market correction, additionally warning that increasingly advanced AI models could heighten cybersecurity risks for the global economy. 

Cathie Wood declares ‘golden age’ for equities after bumpy ride

Market veteran, Cathie Wood has declared that global equities are entering a new "golden age", arguing that advances in artificial intelligence, robotics and other disruptive technologies will drive stronger economic growth, productivity gains and potentially push the United States into deflation. Despite ongoing concerns about inflation, geopolitics and competition from China, the Ark Invest founder rejects these worries and remains optimistic on innovation-focused companies such as SpaceX and Tesla. 

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