ANALYSIS: PR pros must bring more value to the issue of corporate governance to have an impact

Corporate governance is probably the number-one issue on the agenda for most CEOs today, so it's not surprising that PR firms are looking to cash in, forming specialist practices designed to help companies enhance the credibility of their governance efforts. Equally unsurprising is the reaction of business experts, many of whom believe PR firms are over-reaching.

Corporate governance is probably the number-one issue on the agenda for most CEOs today, so it's not surprising that PR firms are looking to cash in, forming specialist practices designed to help companies enhance the credibility of their governance efforts. Equally unsurprising is the reaction of business experts, many of whom believe PR firms are over-reaching.

Some critics have made the case that good governance is about substance, not spin. Richard Steinberg, president of Steinberg Global Asset Management, has been blunt in his assessment of efforts to portray lackluster numbers in a more favorable light: "We ignore it. We look at the facts and we decide for ourselves without being spun." (There's skepticism inside corporate America too. Many of the conversations about governance are taking place among CEOs, CFOs, lawyers, and management consultants, not PR professionals.) If clients are looking to PR people to help them "spin" their numbers, PR firms are going to do more harm than good in the governance arena. One of the reasons for the mess we're in now is that numbers have been manipulated by finance executives - eagerly abetted by communications professionals - who believe they can make those numbers mean whatever they want. But governance is a PR issue central to the relationship between an organization and its key publics. On this front, PR firms can help companies develop strong, credible relationships. And that means PR people have to do two things they have not done particularly well in recent years: listen to what external stakeholders are demanding, and explain those demands to senior management; and offer substantive counsel, helping management formulate policies rather than just communicate them. "We can't advise [clients] on how to form their boards," one agency exec told Investor Relations Business recently. But that's exactly what PR people must be able to offer if they are to bring any value to governance. The composition of a company's board is key to credibility in the governance arena. How can we help companies regain credibility if we are not involved in such decisions? Some will question whether PR people are competent to offer such advice because too many PR pros have been willing to go along with clients who prefer a cheap cosmetic fix to an expensive substantive solution, and also because too few PR people understand the fundamentals of the businesses for which they work. (This is one of those cases in which PR and IR people need to break out of the silos they've built in recent years.) The ability of PR people to rise to this challenge will be a key to determining the future relevance of the function to senior management.
  • Paul Holmes has spent the past 15 years writing about the PR business for publications including PRWeek, Inside PR, and Reputation Management. He is currently president of The Holmes Group and editor of www.holmesreport.com.

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