Top >> Corporate_Communications Opinion:  Pressure on CEOs and Directors to meet public expectations published February 2003 By Grant Common, Editor 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. What is the link between the problems facing Commonwealth Bank and its perceived lack of disclosure and transparency, and the proposal by the NSW Liberal Party to create a Regulator-General responsible for handling the flow of information from Government? The answer is that both illustrate a growing issue facing Governments and companies - the public’s assumption that it is entitled to a greater flow of information than ever before, as a right! In Government’s case, a large and sophisticated PR/media/minder machine has developed over recent years to handle how and when information is released.  In the main that has improved the public’s knowledge (albeit it with a bias from the Government of the day), but has left itself open to accusations of information being withheld and manipulated, which is what the NSW Liberal Party is driving at. On the corporate front, Boards and CEOs have, in the main, been slow to grasp the changing mood and expectations of their various stakeholders.  The problems by Commonwealth and AMP appear, in the main, to be less an attempt to manipulate information, than a case of misreading what the market expected of them. Having said that, the financial and corporate consequences of these corporate ‘mis-judgements’ have been far more serious than any misdemeanours of the politicians. PR activity is too often equated with simply putting a spin on something. But equally a role of PR is to be the conscience of an organisation and for the top level PR advisor to act as the devil’s advocate. PR ethics are all about transparency and honesty.  This is perhaps best illustrated by how companies now handle crises; it was only when the handling of crises faced by companies was taken off the lawyers and put in the hands of PR that companies increased their chances of survival after a major crisis. The limitation here is that corporate PR is being used simply ‘to stop the bleeding’. Whether the Liberal Party’s specific proposal for a Regulator General is practical or not, the principle of a ‘watchdog’ function is worthy of adoption by governments and corporations alike. In theory many companies already have such a function - their PR or Corporate Affairs Director.  But in many cases this role is more about firing the bullets than not getting into a conflict in the first place. Such roles are difficult to carry off successfully. They need to be senior positions reporting directly to the CEO. They need to be filled by people who understand both corporate and public needs and are well versed in the principles of communication. They need to almost fulfil an ‘Ombudsman’ role yet still be part of the executive team.  The fact remains however that companies are getting into awful corporate reputation problems due a combination of misjudgment of the new age of entitlement, plus corporate decentralisation which allows mistakes to flow back up the corporate tree. In the corporate and financial arena two recent examples stand out. In AMP’s case, some of the woes might have been avoided if it had adopted an overall strategic approach to disclosure of its UK problems; and if the CEO had better understood the current financial market and shareholder watchdog agendas.   In CBA’s case, it is difficult to understand that the possible liability wasn’t exposed during due dilgence and that there wasn’t a distinction made between ASX obligations to report and the reality of the marketplace. But risks also extend to the marketing and brand area. One major company recently had to withdraw an advertising campaign that purported to be featuring customers when they were in fact actors.  Such an occurrence should never get through the corporate radar.   An emerging trend is for companies to chase niche markets with ad campaigns and initiatives that are inappropriate to its main stream customers.  Pepsi is currently facing a backlash in the US from its work in ethnic markets.  And expect to see a couple of Australian brands risk alienating their main stream customers in their enthusiasm to reach the gay and lesbian market at this time of the year. All these examples have the common thread that they show a lack of awareness, judgement and sensitivity to the environment in which companies have to operate today. But each of them also shows a failure in PR/communication, usually not by the people filling these roles, in attempting to redress the situation; rather the fact that policy decisions were made without adequate consideration to the public consequences of the actions proposed. It seems overall that company executives are just too slow to adjust to the demands of media, financial markets, key stakeholders and the public at large.  Many of them are struggling simply to come to grips with new compliance provisions without realising that this is the minimum that needs to be done - not the maximum.  It’s becoming clear that regulatory compliance and stakeholder expectations are still poles apart. Not only is today’s commercial world is a fishbowl, viewers of the fish expect to see in much more clearly Questions to ask yourself about your company. Is the PR role senior enough in the corporate structure to have real influence at the CEO/board level? Does PR have a ‘screen’ role for marketing initiatives to ensure their appropriateness? IS PR recognised in your organisation for its strategic importance rather than simply for its message delivery role? Does the extent of your internal PR capabilities cover all aspects that confront today’s corporations?     Grant Common Editor

PR Influences Australian Public Relations Newsletter. Article: Corporate PR: 4 questions for the CEO to ask about the company. Information Content: Opinion & Comment, Corporate Communications