Much attention has been given to the financial shenanigans that have taken place in corporate America. Nefarious schemes have been uncovered by ambitious prosecutors that have defrauded employees, stockholders, and the public at large.
As companies like Tyco, Enron, and WorldCom have demonstrated, too much of corporate America has reveled in massive Ponzi schemes to falsely magnify corporate earnings so that a few powerful insiders could enrich themselves.
Once these schemes unraveled and were exposed, and, subsequently, indictments were handed down, federal, state, and local enforcement agencies and regulatory bodies have focused on cleaning up corporate America's act. Along came Sarbanes-Oxley and corporate accountability. Then came independent audit oversight committees to monitor everything from corporate deal making to executive compensation, 401k plans, company books and accounting systems, and financial-statement disclosures.
Given the Pandora's box that has opened up during the past five years, it is unlikely that a corporate CEO or CFO will ever again dare to resort to shady financial maneuvering to raise the company's stock price or funnel out millions to themselves.
Much has been made about the need for independent accounting and financial oversight while the reputation of many companies receives short shrift.
While significant steps have been taken to rectify corporate America's financial sins, little has been done to salvage its more important asset - its reputation.
I propose that every publicly traded company in America add another vital oversight component to the mix - a corporate reputation oversight committee.
This committee would run parallel to the present day, obligatory independent audit oversight committee. It would be led by the company's chief corporate communications officer and would consist of reputable independent PR and communications professionals. The committee also would include representatives from a company's customer base, community, staff, and the public at large.
The primary function of a corporate reputation oversight committee would be to guard, restore, and maintain a company's reputation among all its constituencies. It would research and evaluate the manner in which a company does its business and how it communicates it.
Research would be a vital tool in identifying each company's crucial issues with respect to reputation. Attitudes toward the company would be evaluated, and steps would be instituted to enhance the company's reputation through powerful and positive PR programs.
Many companies experience crises and catastrophes other than indictable acts. There are strikes, plant accidents, and natural disasters. A corporate reputation oversight committee would ensure that the truth would be told and corrective steps taken, and that a company would act in the best interests of its audiences and remain an upstanding corporate citizen.
What is most important about such a corporate initiative is that the CEO recognizes that corporate reputation is even more vital than a clean balance sheet. The CEO also needs to understand that he must turn to seasoned PR pros to make corporate reputation a strong asset rather than a liability.
I urge such PR professional interest groups as the PRSA, the Arthur Page Society, and the Council of PR Firms to rally behind this premise so that our collective skills and professionalism can help get corporate America back on its feet.
In my book, The Persuasion Explosion, I define PR as follows: "Public relations is the shaping of perception, through communication, for the achievement of positive goals." The emphasis on positive goals means that the power of PR must be used decently, responsibly, and with the highest regard for legal and ethical standards.
The PR profession needs to wage an active campaign to encourage corporate CEOs, their boards of directors, regulatory bodies, and even an act of Congress itself to mandate the formation of a corporate reputation oversight committee in all public companies in America. The public will no longer tolerate stonewalling nor distance itself from corporate agendas. We've been burned, and thousands have lost their life savings as a result.
It's not enough to protect financial assets. Study after study has shown unequivocally that consumers tend to buy products and services from reputable companies. So a positive reputation becomes more than just a do-good activity. It becomes a vital tool in the way a company succeeds in the marketplace. When the corporate reputation oversight committee function becomes a standard tool, the public will be better served and the role of the PR profession will become even more indispensable. Moreover, PR's value to the CEO and our place in the corporate boardroom will be secured.