Bright Lights Project -- Aon

Aon, a large insurance broker headquartered about 20 minutes from my house in the suburbs north of Chicago, announced earlier this month that it is moving its corporate headquarters to London. Company execs were quoted saying that the move was intended to “reinforce the global connectivity of the firm” by moving its leadership closer to the emerging markets it serves and London insurance hub with which it works.

Of course, it’s a lie, only in the spirit of many corporate announcements: It’s plausibly true, and was probably relevant at some stage in the decision-making process (versus contending with a relocation to, say, the top of a mountain in Tibet, which would make conducting business more difficult).

The UK government recently liberalized its tax law -- something called the “controlled foreign companies” taxation regime -- that lets companies based in London drastically lower tax payments on foreign profits. If Aon is headquartered there, its sales in the US as well as in those emerging markets will be considered foreign income.

So it’s a scheme for the company to keep more of the money it earns. The Chicago Tribune reports that relocating execs are getting paid exorbitant amounts of money to ease their transition to life in London (move allowances, help with rental or mortgage payments, transportation assistance, etc.). There must be a whole lot of tax savings pegged to stay in Aon’s bank accounts.

Wouldn’t it be great if it simply told everyone the truth?

The closest CEO Greg Case to come to admitting it was to say that “...the fundamental driver behind this decision was strategic.” What does that mean? It means he had a compelling financial reason to choose London over Chicago, but doesn’t have the respect for his customers or critics to say so. Boeing did something similar when it relocated to Chicago, claiming it was to build a larger business (whatever that means) instead of admitting it was escaping its unions, and benefitting from huge tax breaks.

Issuing half-truths or overt lies seems so needless when it comes to corporate relocations, especially since the financial deals underlying them are usually knowable from regulatory filings or city development reports. If the entities moving make good to their abandoned staff, the whole shebang is sad for the region losing the jobs but balanced by the place that’s getting them. Business involves making tough decisions (companies choose, ignore, and fire vendors and suppliers of every stripe every day). Relocating offices or factories is one of them. We all get it.

So why lie? I think it makes the execs feel better, somewhat, as they repeat the public rationale enough perhaps to believe it. It also fits in with standard marketing and branding canon: Say it and it will be so. Touting some minor benefit of moving as the major benefit is not too far removed from promoting brand attributes that are ephemeral, imagined outright, or also simply not true. Marketers do it all the time.

And then they wonder why consumers don’t believe much of anything marketers say to them.

If Aon followed the bad advice of lying about its corporate move when it didn’t have to, I’ve got to wonder what else it fibs about. How many of the press releases it issued over the past month (or years) contained half-truths or purposefully obfuscated the truth? How many other companies are similarly afflicted? Could there be a disbelief discount that is factored into its stock price, or a fibbing factor that potential clients or partners charge the company when they analyze Aon’s pitches or promises? I bet there is.

I don’t have three bullet points ideas about what Aon could do to remedy this situation, other than tell the truth. Not just this time, but all the time.