"Conflict of interest" are three little words that excite conspiracy theories and denunciations, even as they prompt smart businesspeople to look to their own practices.
The feature on page 17 ("The Middle Men"), which examines the role of consultants who help companies conduct agency reviews, raises the question. It reports that many firms that are engaged by clients for searches also receive payment from PR agencies for everything from strategic consulting to speaking at employee seminars.
Consultants aren't hiding the relationships, and several even post full and inclusive client lists on their websites. Full disclosure of any relationships - past or present - should be actively given to a prospective client prior to engagement.
But clients are not the only stakeholders here. Agencies that are shortlisted by consultants should also be told of any prior or future relationships with other firms, whether or not those firms are also shortlisted. This may seem unnecessarily cautious, but PR firms are already skeptical enough of the consultants' process without adding to deep-seeded suspicions of cronyism. Remember too that today's agency executive is tomorrow's in-house client, and vice versa. In an industry that relies principally on managing relationships, a misunderstanding over conflicts will not be soon forgotten.
Of course, the best option may be for consultants to avoid taking fees from agencies altogether. Many firms would like search consultants to go away, believing they hinder a delicate process and put up barriers between agencies and clients. The onus is on the consultants to prove their professionalism, objectivity, and credibility.