If the Equitable Life rescue plan put before policyholders last
week is accepted, it will be something of a victory for the firm's PR
advisers. The deal, under which the HBOS bank will rescue the crippled
mutual, could signal the end of two years of trauma for Equitable and
its policyholders.
The society says the present 'compromise' deal represents the best
chance to remove the unlimited liability hanging over its head as a
result of past misjudgements relating to a guaranteed annuity rate
policy.
But for the deal to go through, policyholders will need to have been
convinced of the probity of the society's new management; the wisdom of
its approach, and, crucially, to accept further personal losses - up to
16 per cent of savings having already been written off.
As the deal goes to policyholders, much centres on the work that has
been done by the communications team - led by Burson-Marsteller, with
The Maitland Consultancy handling press and document drafting, and the
in-house operation led by PR head Alistair Dunbar providing back-up.
The Guardian personal finance correspondent Rupert Jones says: 'If they
can pull it off it will be viewed as a coup for the PR bods. There are
three votes, each with a minimum threshold - if they do not get all
three they are scuppered.'
William Clutterbuck, a Maitland partner, says the entire Equitable
crisis is about PR: 'We have hurdles to reach that are not so much
hurdles as "Beecher's Brook," and we have to get policyholders to
understand the importance of voting.'
If communications is crucial, the omens are not good. Earlier this year,
Equitable Member Action Group chairman Paul Braithwaite said the company
had provided 'a textbook study of how not to handle communications'.
He criticised the company for its failure to provide the 'rationale'
behind past decisions.
Damage to the company's reputation was compounded by news that two
former directors, Alan Nash and Chris Headdon - who stepped down as a
result of the crisis - will receive annual pensions of more than £90,000 each.
The mud stuck particularly firmly since MPs and journalists were among
those with pensions affected by the problems.
When the company's new CEO Charles Thomson and chairman Vanni Treves
appointed B-M in August, the brief was to re-habilitate the company
after this spate of bad press, with a view to shaping the environment
within which last week's offer to policyholders was made.
B-M deputy chairman and campaign director for Equitable Gavin Grant
says: 'Charles Thomson's concern was that the society had to launch a
complicated scheme into an atmosphere which was not promising. Our role
was to take charge of communications and provide an overall
strategy.'
Central to the strategy B-M oversaw was what Grant describes as the
biggest City-based public consultation ever undertaken. It involved the
new management touring the country in an election-style battle bus,
holding 18 local meetings.
Like a political party on the stump, the agency also organised polling
to track how opinion was shifting among policyholders. The polling
gauged the success of two key messages. First, that the new management
was untainted by what had gone before. And second, that there was only
'a single pot of money' available from the Halifax to compensate
different groups of policyholders with different situations, and that
the interests of each group had to be surrendered to the interests of
policyholders overall.
'If everyone was to argue for their own corner it would not work. There
was a single win-win strategy and only one way forward,' says Grant.
Jones is kind about the agencies' efforts on behalf of the society:
'They have done a good job in terms of getting the CEO in front of the
press, pushing the message and saying this is crunch time. And the
materials they have sent out, the voting packs and Q&A booklets, do at
least grapple with the key issues and tricky questions,' Jones says.
So far, Grant claims, evidence from the polling suggests that the PR
messages are getting through, with more than half of all policyholders
agreeing that the company's communications have improved since
August.
But the policyholders will deliver the final verdict in their vote which
has a 7 January deadline. PR efforts will continue until then,
especially targeting The Daily Telegraph and The Times - the two key
papers in terms of reaching policyholders.
The signs do not look good. Even on the morning of the announcement of
the offer, Braithwaite was on Radio 4's Today programme picking holes in
the communications surrounding the offer, claiming that one of the
company's many press releases had got the number of policyholders
wrong.
Jones says the biggest problem is apathy, not no-voters; if people do
not get round to responding, the offer will fail: 'Strong words have
been issued today. Quite rightly they are using language designed to get
people sitting up in their chairs. They know they are competing with a
lot of other distractions over the Christmas period.'
HBOS has already paid an initial £500m for the society with
another £250m to follow if the compromise is agreed by March next
year. If no such agreement is forthcoming, the prospects are bleak. If
it is, the PR teams will have earned their money - and a lot of people's
pensions.
