Opinion:  PR likely to join auditors in facing corporate fallout published June 2002 by Grant Common Grant has 30 years direct experience in public relations and communication in Australia and New Zealand - as well as directing and managing programs in the UK and USA.  He has consulted to Governments, publicly-listed companies, industry bodies, marketing organisations, multinationals and not-for-profit organisations. He is Managing Director of Sydney-based Network Communications and principal of Comsult Communication Design, a consultancy specialising in the emerging management discipline that focuses on how organisations internally plan, structure and organise their communication. As a Graduate Member of the Australian Institute of Company Directors (he completed the Company Directors Course Diploma 2002) he is also one of the few PR practitioners to have the perspective of the company director. The raft of corporate disclosures and collapses, and the sudden demise of several high profile corporate executives, that have occurred in both the US and Australia in recent times puts the spotlight not only on auditors, but also on the public relations business.  Maybe it’s timely that aspects of each practice are now due for some sober review. A characteristic of the heady times of the last decade has been the exponential growth of PR in corporate and financial markets, as ‘spin-doctoring’ has become the norm rather than the exception. It has been a vicious circle.  The analysts and media have had a predilection to put more weight on executives’ personalities and what they say, rather than companies and what they do. Australian financial media has been especially guilty of putting personalities in the spotlight.  The way media reports locally you would often be forgiven for concluding that CEOs make every single decision in every part of the world! This has put enormous pressure on CEOs to ‘perform’ in public.  Witness the ridiculous market reactions - from media and analysts alike - to changes in CEOs and the impact this has had on share prices.  Millions have been wiped off market capitalisations, based on what have often essentially been personality profiles. Indeed, it can be reasonably argued that without significant improvements in sales or profitability, many companies have welcomed, or in fact encouraged, this personality cult focus as one sure-fire means of increasing their share price.  And of course, many of the personalities themselves have stood to make eight figure profits from the resulting share price rises.   This ‘personality cult’ approach has fed the PR machines. As executives have had to perform more, and meet the needs of media and analysts, they’ve turned to the slick PR operators with all the right contacts to ‘oil the wheels’. The result has been an elite group comprising media, analysts, the ‘personable’ CEO and the spin-doctors.  Others outside this couture have often watched with bemusement - they either haven’t wanted to participate or haven’t had the skills to play this game. Many CEOs sitting on the sidelines watching have known their corporations have had more intrinsic value than those in the limelight.  But they weren’t the right people for the times! Well the carnival may be coming to end. Just as the less ‘sexy’ companies are being rediscovered perhaps the less than charismatic CEO will begin to be seen more in the context of the organisation he (or she) is heading. And valued on his or her business skills! At the same time perhaps PR will begin to be seen less as a flashy tool to help polish the presentation skills and personal profile of the CEO, and be recognised more for its solid contribution to improving communication about the company as a whole with important stakeholders. The issues that have led to the climate of distrust business is increasingly facing are many - analyst pressure on short-term results over long-term value, heavily incentivised senior executives also with a short-term focus and media often trying to portray the business-world as some kind of Hollywood equivalent. But just as the problems faced by companies and auditors will result in the need for more diligence and more effort, not less, the same is likely with PR in the corporate environment.  What is likely to be different for PR is that: More emphasis will need to be placed on communicating company rather than personal attributes. More effort is going to have to go in helping organisations win back trust (or at the very least minimise the risk of suspicion!). That’s going to require solid communication and more inter-action direct with stakeholders. The skill-set of the PR Manager or external consultant is likely to move from just media-skills to more strategic communication advice and counseling. Working with the CEO and helping he or she relate to key audiences, including the media, will remain important but it will be on a different basis with the need for more corporate discipline within clearly defined frameworks.  The need to communicate to media and analysts won’t lessen - in fact the pressure may increase. But the tone, manner and messages will need to be very different.  Now is a good time to re-evaluate the value of corporate reputation, and not just with investors.  Business partners and customers large and small will be looking for clear signs of trust and solid reputation in the immediate future. While the dust has yet to settle - Worldcom’s future is still undecided and some key corporate investigations in Australia have yet to run their course - there is no doubt that business faces a markedly different future. From a PR perspective, less emphasis on the hype and more on solid, meaningful, and responsible communication will be welcomed. If there is some fallout from this so be it.     Grant Common Editor

PR Influences Australian Public Relations Newsletter. Article: PR likely to join auditors in facing corporate fallout. Information Content: Opinion & Comment, Corporate Communications