Five ethics policies for analyst firms

Do vendors pay analysts to say what they want them to say? Not normally. Vendor support for the analyst community is substantial: many obtain more revenue from vendors than from users. Most  analyst houses cannot have their opinions bought, but few have clear policies to help explain it. Uncritical research stands out sharply and will often be discounted by people planning technology investments. Below are five policies, taken from a

Below are five policies, taken from a Giga Information Group document, that I think most analyst firms should consider.

  1. organizationally separate any commercial relationships with vendors from its findings
  2. do not in any way tie its findings or its research coverage to the absence or presence of a commercial relationship
  3. do  not withhold research coverage due to the absence of a commercial relationship.
  4. Research personnel shall not be influenced by sales personnel or by management personnel with the intent of directing or influencing specific research findings for financial gain.
  5. To the extent that any special products or services are developed which are sponsored by vendors either directly or indirectly, such sponsorship shall be disclosed explicitly in a fashion physically proximate to the research.

The lack of such clear policies has mean that some vendors  are standoffish about analysts. In particular, some vendors have found an issue with smaller analysts firms or those focussed on marketing. They can get into a cycle when the is analyst focussed on how the vendor can improve its rhetoric and slides, and the more the vendor follows the analysts advice, the better the feedback gets — even though no real change has happened in the company or its standing in the market.

Are there other ethical policies you think analyst firms should consider, or any other fears that you think analyst firms need to anticipate?

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As SageCircle research director, Chapple directs programs that assess and increase the business value of relationships with industry analysts and sourcing advisors.