In today’s environment, the mere threat of an embarrassing lawsuit or the public release of potentially damaging charges  — regardless of veracity — can throw management off its game for months, even years. As a result, CEOs of public corporations are losing their appetite for risk. They’ve grown hesitant to explore new ventures, new terrain.                          —Maurice R. Greenberg, former chairman and CEO of AIG

Corporate executives were berated years ago in the ClueTrain Manifesto — the bible of some bloggers — for failing to let it all hang out and engage nakedly in what is known as “the conversation.” However, the ClueTrain cult members have never truly taken any responsibility for the implications of their wild-eyed advice. If they had, they would realize that, in today’s over-regulated and over-lawyered environment, the extreme transparency they advocate is a suicide pact for Corporate America.

Perhaps I’ve missed something. But I rarely read measured analysis on this subject. While Robert Scoble and Shel Israel offer some sensible advice on the limits of corporate blogging in their recent book Naked Conversations, we are more likely to be confronted with snotty, self righteousness in the blogosphere — stuff like Jeff Jarvis’ open letter to Michael Dell.

It’s no wonder that corporate executives are unwilling to “open the kimono” (what an awful image that is) and bear their souls to a bunch of hostile strangers — and lurking lawyers. Just imagine what a field day legal parasites like William Lerach would have with such openness.

But don’t get me wrong. I think open and honest communication is a powerful thing. I agree with the ClueTrain premise that “markets are conversations.” And I believe winning corporations will be those that get in front of the curve and learn how to participate in these conversations in an effective and sensible way. Just don’t stand nakedly out there — and don’t, as the ClueTrainers relentlessly demand, simply speak your mind. Why? They will tear you apart.

Consider this: Companies are now exiting or avoiding America’s public markets to escape the excessive costs and risks they now represent. As Mr. Greenberg noted in a recent issue of the Wall Street Journal, heavy regulations — such as those associated with Sarbanes-Oxley — have stultified the public markets.  “Of the 25 largest IPOs worldwide in 2005, only one took place in the U.S,” he noted. “Most went to London or Hong Kong. Even Australia weighed in with three.”

Here’s a thought. If you want to be more open and transparent, then maybe you have to take your company private (or stay private). It’s happening in high tech. Sungard Data Systems, WRQ, Attachmate and many others have been taken private in recent years. And Greenberg cites other major companies going (or planning to go) private: Hertz, Toys “R” Us, Kinder Morgan, Albertson’s, Univision. While these companies are likely taking action to get out from under the oppressive weight and costs of regulation, these concerns also apply to the risks of open communication.

The point is that companies may be simply too exposed on the public markets to engage in open and honest communication. Expect more of them to go private, escaping the glare of securities regulators, zealous trial lawyers and Wall Street analysts. That, ironically, may be the only sane and sensible means of becoming transparent.