‘Courage is telling a CEO what he doesn’t want to hear’

The New York Stock Exchange needs reputational help following Dick Grasso’s embarrassing exit, writes US commentator Paul Holmes

Sometimes, when I’m explaining to someone outside the profession what good PR looks like, I’ll get the following response: ‘That’s just common sense.’

Not quite, I tell them. PR is applied common sense. Of course, sense is not nearly as common as we’d like to think, and applying it is more difficult than it looks – which is why 100,000 people continue to earn a living doing what we do.

The words ‘common sense’ flashed through my mind more than once over the past couple of weeks as I watched Dick Grasso’s career as chairman and CEO of the New York Stock Exchange implode in appalling slow motion.

If only he’d looked at the nine digits on that paycheck and thought for a moment about how they might look to other people. If only he’d got out ahead of the story, rather than allow bad news to drip out like Chinese water torture. If only he’d seemed just a little embarrassed.

If only someone with the right combination of wisdom and courage had walked into Grasso’s office and slapped his face until he realised the folly of his ways.

That’s what applied common sense is: the wisdom to see a PR blunder coming before it hits the front pages and the courage to do something to stop it. Courage means telling the CEO what he doesn’t want to hear. In this case, courage might have lost a PRO his or her job, but it might also have kept Grasso in his.

Now, of course, the institution’s counsellors must turn to their new most important client. Not John Reed, who demonstrated his PR savvy by taking the interim job for just one dollar – a gesture that looked like pandering to me, but served to underscore Grasso’s shortcomings – but the NYSE’s board of directors, who have some explaining to do.

Let’s start with Carl McCall, nominally the head of the exchange’s compensation committee, who told reporters he didn’t realise just how much the CEO was taking home.

McCall needs to go. So do the rest of the directors. The New York Stock Exchange needs new, independent oversight that is drawn from outside the industry: institutional investors, shareholder activists and academics, for example.

And it needs rules that prevent its new CEO from getting too cosy with board members. Restoring the organisation’s reputation will take plenty of wisdom and courage.

Paul Holmes is editor of www.holmesreport.com

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