News Analysis: CEOs in crisis seek personal touch

Conrad Black is not the first ousted senior business executive to need personal PR guidance. Tom Williams examines the extent to which PROs can profit from providing personal advice to high-profile business moguls.

The roasting the media dished out to former Telegraph Group chairman Lord Conrad Black last week was just the latest in the stream of bad eggs to be thrown at the peer since the crisis at Telegraph-owner Hollinger International broke at the end of last year.

Hollinger has retained its own corporate PR adviser in the form of US firm Kekst & Co, while Black was quick to hire James Badenhausen, a partner at Robinson Lerer & Montgomery (RLM), another US consultancy, just before his Hollinger exit.

Black continues to retain RLM during his current difficulties over the report into the allegations that he and a handful of associates took substantial amounts of cash from Hollinger. The arrangement is likely to be a nice little earner for RLM in both the short and long term.

But can PR consultants on the hunt for new business really tap the market for providing PR advice to high-profile former executives or City high-flyers?

If it is true that an organisation's choice of retained PR agency is heavily influenced by the company the CEO keeps, that relationship is magnified in the personal PR arrangements a corporate director might make if he or she is ousted in less-than-ideal circumstances.

Former Railtrack chairman Gerald Corbett's relationship with Tulchan Communications founder Andrew Grant stretches back some 12 years to when Corbett was group finance director at international building materials supplier Redland.

The strength of this relationship was a key factor in Grant's willingness to continue to advise Corbett on a pro bono basis after the former resigned as Railtrack chairman following the Hatfield crash.

Powerscourt co-founder John Murray, who advised former WestLB principal finance unit head Robin Saunders, says that getting to a position where a PR consultant becomes the natural choice involves being there and building the relationship 'through the arc of CEOs' careers'.

Murray began advising Saunders separately to WestLB nine months ago, just before she stepped down from the unit whose high-profile deals had contributed to the investment bank's £1.1bn loss in 2002.

'A chief executive or chairman will be used to having a high level of PR support. When they are between jobs, people who have worked for them before might continue to help them out pro bono,' says Murray.

Relationship-building

In the case of Corbett, and others, the individual hires the individual, and the work that top-flight PROs do for executives in trouble is largely separate from that of the retained work their agencies do for companies.

This is particularly the case when a director or senior corporate figure comes under personal media and/or shareholder pressure, as was the case with former Marks & Spencer CEO Roger Holmes and ex-Carlton Communications chairman Michael Green.

One practitioner with experience in this area says it is often essential for both the ousted executive and the media that the high-profile executive uses an adviser to ensure there is some balance to the big guns rolled out by the executive's former employer. 'Journalists do want to give people a fair deal, so they will listen to what you have to say. Most of these people are gagged by clauses in their contracts, but there are ways and means of getting their message across,' he says.

Helping out a friend or former longstanding client in a tight spot can prove to be extremely lucrative in the longer term - even if it is done for free in the first instance.

Tulchan is retained by Woolworths, where Corbett is now chairman, and took on the M&S adviser role after Stuart Rose, who Grant had worked with for several years, took over as CEO. Similarly, Brunswick founder Alan Parker has, in part, built his business on his talent for networking and transforming personal relationships into profitable business deals.

But PROs thinking of calling up the next CEO to get the chop should think again. The very nature of the relationship that makes a consultant the natural choice to call for professional advice that is often personal means such work is not necessarily a short cut to that lucrative retained contract.

Making money is not the whole point of such arrangements, argues Grant: 'If you are going to advise someone on this basis, you have do it without expectation of a future relationship. Most CEOs will have someone whose judgement they can rely on and who they can turn to for advice.'

Although Grant is probably right to stress the need to be clear on what work you are prepared to do and why you are prepared to do it, it seems unlikely that many PROs would take up the hot seat for an ousted CEO completely free of charge. But perhaps any PRO who invests time in a personal relationship with a CEO in the hope that it might be reciprocated with future PR bucks doesn't need much sympathy when there is no immediate payback.

After all, perhaps the thrill, kudos and experience gained from having been at the head of things when the media starts to bay for blood - and helping out a friend - really is payment enough.

BOSSES' PERSONAL CONTACT WITH PROS

Conrad Black: James Badenhausen (RLM)

When news broke that Black and other Hollinger International directors had taken non-compete payments in connection with the sale of Hollinger assets, Black called in James Badenhausen, partner at US PR firm Robinson Lerer & Montgomery (RLM).

RLM continues to advise Black over the media fallout from a report lodged with the US Securities and Exchange Commission last week, which estimated that cash taken from Hollinger by Black and some associates amounted to 95 per cent of the firm's net income between 1997 and 2003.

Gerald Corbett: Andrew Grant (Tulchan Communications)

Corbett had retained Tulchan Communications as retained adviser while chief executive of the now-defunct rail infrastructure company Railtrack.

Agency founder Andrew Grant continued to advise Corbett free of charge after the latter resigned in the wake of the Hatfield crash.

Corporate manslaughter charges brought against Corbett and other Railtrack directors were dropped last week after the High Court found no evidence against them.

Michael Green: Alan Parker (Brunswick)

Green first drafted in Brunswick's ubiquitous founder Alan Parker last year to advise him and the Carlton Communications board on the acrimonious merger of Carlton with Granada Media. Green, who was Carlton chairman at the time and had been named as ITV chairman-designate, was eventually forced from ITV by shareholder pressure.

Brunswick still advises Green and his businesses on a project basis, most recently on a planned bid for the United Cinemas International chain.

Roger Holmes: Nigel Whittaker (Reputation Inc)

Former Marks & Spencer CEO Roger Holmes called in Nigel Whittaker as new chief executive Stuart Rose prepared to set out his strategy for the renewal of M&S in July.

Whittaker was primed to respond to criticism of the stewardship of Holmes and chairman Luc Vandevelde. In the end, Rose's report did not dwell on their tenure, during which the high-street icon was frequently seen to be losing ground to its cheaper and more fashionable competitors.

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