If you were an investor, or even a fund manager, researching a company for your next investment, you probably wouldn’t base your decision on information gleaned from the company website. Corporate communications teams are eager users of jargon and hyphenated praise. They are not to be trusted. They fill these pages with references to best-practice operations leading to win-wins, ROI and greater synergy. What you seldom read is how the company is faring against rivals, or how the company’s recent investments are panning out, or where it needs to invest more. For the honest take, you need to pay a corporate analyst for a glimpse of his report. It’s an outsider’s take, but at least it’s an honest one.

The dawn of corporate blogging about two years ago was supposed to inject some clarity into the world of corporate communications. For once, customers, suppliers, shareholders and employees would be able to read the deep thoughts of company executives and get a clearer idea of where the company was heading or how top brass felt about certain market forces affecting the industry, whether it be the impact of a declining housing sector or the pressure to upgrade the industry’s green credentials.

Sadly, corporate blogs (and there are still not many out there) talk little about big ideas. Instead, they sell. They have been turned into a fireside chat where marketers discuss the roadside manoeuvrability of, say, General Motors’ new SUVs or Google’s widget du jour. Corporate blogs are primarily an extension of the marketing department, as was the early company website, and thus they serve just one segment of the potential audience: the customer. In short, corporate blogs seldom say anything that you haven’t already read in a press release or heard in the radio advert.

In the past year, this has begun to change, albeit slowly. The chief executives of a number of listed companies are using the forum to do more than simply parrot the latest marketing campaign. For example, Jonathan Schwartz, Sun Microsystems’ chief exec and the most prolific blogger of the executive ranks, has been lobbying the Securities and Exchange Commission to allow company executives to blog about strategic, and potentially market sensitive, moves.

Reuters’ chief executive, Tom Glocer, has used his blog at times to talk about the shareholder value of news amid the Thomson-Reuters merger talks, and about consumer trust in media. For the latter, Glocer has attracted 865 readers to a post he wrote last November that includes a link to a TV interview in which he answers questions about how a Reuters photographer could have got away with adding smoke plumes to a photo to sex up the damage of an Israeli bombing raid on Beirut.

Treated properly, blogs can be an ideal communications tool for chief executives. It is their job, after all, to keep various stakeholders informed about not only the company’s present and future business practices, but where the company stands on issues impacting the entire industry. What better way to communicate this than via a blog that readers can subscribe to, and which encourages feedback and debate?

Any long-term investor would value a transparent chief executive. But, of course, honesty and openness alone are no guarantee for job security. The leader of a listed company is judged of course by share price, not trackbacks and RSS subscriptions. So I did a quick sampling of ten companies to see how their share price performed since they’ve begun blogging. I chose ten firms from various industries (tech, aviation, hospitality, media, cosmetics) that are headquartered in India, London, Paris, Milan and the United States. Each company has been blogging for at least six months.

The list would make an odd index for a fund manager to consider – would you invest in “The Blogging 100”? But they are representative in this regard – they represent the new guard of management transparency. The firms are: Reuters, L’Oreal, Sun Microsystems, Rediff.com, Ducati Motors, General Motors, Benetton, Boeing, Southwest Airlines and Marriott International.

How have they fared? Surprisingly, very well. Shares in seven of the ten firms are up since the company began blogging; Benetton’s share price has increased nearly 20 per cent since it launched a progressive blog in December, 2005 discussing its corporate and social responsibility activities; Reuters is up 25 per cent and Boeing has nearly doubled since it started blogging in January, 2005.

A host of reasons can be attributed to the share increases that go beyond the influence of social media. For Ducati, the company is up 25 per cent since installing a new chief executive this spring and on speculation it is on the brink of forming a joint venture with competitors that will presumably cut down on production costs. Reuters share price hike is mainly due to the Thomson merger, and Boeing has scored a series of new contracts. But, it should be noted that, with the exception of the Ducati market speculation, each of the firms has discussed on their blog the issues in the news impacting their company.

Let’s be clear: a blog post from the chief executive, no matter how clever, cannot move markets in any meaningful way, barring a bombshell admission. But the blogs cannot be discounted either. A host of studies show that investors are more loyal to companies that adopt a straightforward and transparent tone with all stakeholders, from investors to customers. And blogs, if they actually say something, can have an impact on managing investors’ expectations, which is the only true way of capitalising on positive news and minimising the toll of negative news. Boards would be wise to consider the corporate blog for just such a purpose.

I read corporate blogs a lot. Maybe too much, partly out of curiosity (no, not as a prospective investor), and partly for my other job, as a social media consultant to corporations. I often blog about this issue here: www.blogging4business.info

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Bernhard Warner, formerly Reuters' internet correspondent in Europe and senior editor for The Industry Standard Europe, writes about technology, the internet and media industries. He can be reached at techscribe@gmail.com