EDITORIAL: Stocks shouldn’t be an option in PR

It must be hard not to feel a twinge of envy when another dot-com start-up makes a killing on the stock exchange. The tale of the fresh-faced, still-pimpled graduate who works from a garage only to become a multi-millionaire is very familiar to the PR pro. And their ’conversion’ into viable, presentable, well-connected businessmen and businesswomen is thanks in no small part to the work of expert PR pros.

It must be hard not to feel a twinge of envy when another dot-com start-up makes a killing on the stock exchange. The tale of the fresh-faced, still-pimpled graduate who works from a garage only to become a multi-millionaire is very familiar to the PR pro. And their ’conversion’ into viable, presentable, well-connected businessmen and businesswomen is thanks in no small part to the work of expert PR pros.

It must be hard not to feel a twinge of envy when another dot-com

start-up makes a killing on the stock exchange. The tale of the

fresh-faced, still-pimpled graduate who works from a garage only to

become a multi-millionaire is very familiar to the PR pro. And their

’conversion’ into viable, presentable, well-connected businessmen and

businesswomen is thanks in no small part to the work of expert PR

pros.



PR is instrumental in the growth of hi-tech companies, a point that is

amply illustrated by the astonishing growth of hi-tech PR, with the top

100 hi-tech practices now accounting for a quarter of the business

generated by the top 100 PR firms ( PRWeek, August 16).



But should PR pros take a share in spoils over and above the fees they

now enjoy, in the form of stocks at ’friends and family’ prices? It’s an

ethical issue that was brought to the fore once again by the speedy

suspension of San Jose Mercury News journalist Chris Nolan (see

analysis, p10) whose actions appear no worse than those of PR pros who,

at some companies, are actively encouraged to accept such options.



Journalists who buy ’friends and family’ stock options can in no way be

said to be acting in the best interests of the public. The motivation

for writing a favorable (or for that matter unfavorable) story is always

going to come under scrutiny.



But what is the position in PR? Arguably, since the PR pro is acting in

the interests of a client, he cannot be said to be independent, and

therefore should not come under the same level of scrutiny. PR, in its

basic form, is about selling - in a subtle way, using third-party

endorsement, but selling all the same.



But to deny that the position is open to abuse is naive in the

extreme.



PR pros are regularly accused of hype. And in the hi-tech dot-com world,

where pre-revenue let alone pre-profit startups are valued sometimes in

billions, and where journalists and analysts regularly have little or

nothing to go on, it is clearly unsuitable if a PR pro knows that their

ability to create a buzz will directly affect the size of their

wallet.



PR is supposed to be about bridging the gap between perception and

reality.



While this writer believes that to be a worthy but rather unreal

endeavor in the world of PR, nevertheless it cannot do for PR executives

to inflate the stock market for potentially personal ends.



Some agencies we spoke to insist that their executives must sell 30 days

after an IPO, to avoid abuse of the system. But is this really the

answer?



Often, after 30 days the company’s stock price may still be wallowing in

the after-glow of successful PR efforts. But what happens a year later,

when the management team has been found wanting, or the product has

proved faulty, and the share price has headed south? If anything, PR

pros should be required to keep their stocks for several years following

an IPO, to ensure that they don’t make a killing from their own hype,

and then ride off into the sunset.



Or better still, PR pros should be banned from taking stocks at ’friends

and family’ prices altogether. It is the PR professional’s duty to be

above reproach. To be anything less is to invite controversy and risk

besmirching the profession still further.



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