City & Corporate: The case for a seat in the boardroom

While comms is now taken more seriously by CEOs, Adam Hill finds there are still few places for PROs in the boardroom.

With reputation management, CSR, and supplier and employee relations rising up the priority list for UK plc, heads of comms have more responsibility today than ever. Despite this, and the fact that an error in PR strategy can affect share price and profits, it is still the case that relatively few PROs command a seat on the board.

In a study last November by the Centre for Public Affairs Studies, half of the sample came from FTSE 350 companies, yet only eight per cent said their role came with a main board directorship. And this is despite almost all of them having direct access to the CEO and reporting to a main board director.

Little seems to have moved on since a 2003 study by Watson Helsby which revealed that, while the activities of in-house comms directors had grown beyond traditional areas - such as external affairs, media relations, internal comms, financial PR and IR - the executive authority of PR had not risen proportionately.

Company boards shrinking

One practical reason for PROs' absence from the boardroom is that UK company boards are shrinking in size. PR is far more likely to be represented, at best, one level below the main board, on an executive or operational board or management committee.

Alastair Eperon, who spent 12 years as director of corporate affairs at Boots, now runs Eperon Consulting. He says: 'Executive membership of company boards at group level has shrunk as good governance suggests they should be outnumbered by non-execs. You will probably have the CEO, finance director, operations director and one other on the board, so the likelihood of PROs being on the full board is not that great.'

Chime Communications chairman Lord Bell adds, perhaps mischievously: 'There is also pressure from FDs, who do not want other directors who control budgets on the board. They prefer to be the only ones seeing the CEO.' Vodafone group director of corporate affairs Simon Lewis joined the company last year with a brief to shake up comms, and with a seat on the company's executive committee a key component of the job. But he points out that there is a difference between the main corporate functions - corporate affairs, HR, business development, company secretarial, strategy and legal - and the business units, such as finance, of a company. 'The commercial reality is that the executive directors on main boards tend to represent the largest parts of the principal business,' he says.

And while the CIPR produces guidance on evaluation on most PR matters, anyone expecting it to use its new chartered status to wave the flag for PR in the boardroom may need to look elsewhere. 'To be frank, it is not something which the institute gets itself worked up about,' says CIPR president-elect Tony Bradley. 'If you look at the importance organisations attach to reputation management, OFR, stakeholder engagement and other areas where PR is driving the agenda, I don't think we have much to worry about.' He believes most PROs are now part of the decision-making process even though not all have a seat at the top table. This is particularly true of local authority in-house teams, he says.

Reputation is main battleground

Bradley's view may appear laissez-faire, but it is echoed by many senior PROs. 'I do not really detect a widespread clamour from the PR profession to get onto the board of major companies,' says Patrick Law, Centrica director of corporate affairs. 'This does not diminish the position of comms professionals within organisations.'

But there is a need for PROs to continuously prove their worth to the board, he adds: 'To work effectively at this level, corporate affairs directors need outstanding technical skills in terms of how they relate to key stakeholder groups, but also management and business experience.'

Since PR still has to prove its cost-benefit equation in a way that marcoms disciplines such as advertising and direct mail now have, perhaps reputation management is the main battleground for PROs fighting to get a foot through the door.

Eperon says: 'The role of corporate comms and the importance of reputation management has been better understood over the past ten years - increasingly by CEOs. This is partly because they have seen attention paid by the media, analysts and other stakeholders to the characteristics of company leaders.'

Reputation damage was one of the main themes of a 2003 report by the influential Pharmaceutical Shareowners Group, while the spectres of Enron and Worldcom still hang over boardrooms. 'Reputation management is coming up the agenda and the corporate affairs professional is as well placed as anyone to be the guardian of this,' agrees Lewis. But he is reticent about the notion that elements such as the Operating Financial Review (OFR) will automatically catapult PR into the boardroom. 'OFR will build on the greater trend to transparency, and transparency, in turn, is about communication,' he says.

There remains a perplexing disconnect between the acknowledgment of PR's importance and its corporate position. One UK head of corporate comms for a US-based multinational, who did not want to be named, throws some light on this: 'PR people are under-utilised. There is still a lack of understanding of what is involved in comms. A lot of what we do is under the radar.'

If true, this, ironically, does not say much for the authority of PR. If communications professionals are not talking up their own value and achievements, who will?


'Board membership not important'

BAE Systems group comms director Charlotte Lambkin does not sit on the executive committee but believes daily contact with the CEO means this is not a problem.

'Being on the executive committee depends on your ego and the hierarchy of the company. Perhaps PR does not have the clout but we are a young industry and it will take a long time, if ever, for us to be on boards. I do not think it is particularly necessary in terms of the effectiveness of the job you do, which depends instead on your access. Boards should be lean and mean, they are there to run the operational side of the business. Non-executives provide the checks and balances for that. They do not need me there as well.

'There is a vast disparity in the way PR is treated in businesses. In some, you are in at the beginning of the decision-making process. In others, you are simply at the end of a phone if something goes wrong. Our biggest difficulty is proving our cost benefit to the bottom line; the more you prove that, the more weight you will have in the boardroom.' ANNETTE SPENCER, ROYAL & SUNALLIANCE

'Board membership is important'

Royal & SunAlliance UK head of external affairs Annette Spencer is responsible for all media relations, public affairs and reputation management for the UK business. Her remit includes subsidiary More Than.

'The executive team, the quasi-board running the business, has agreed to my attendance at monthly meetings. It is a very recent thing that we started trying this year and so far, so good. It is rare but I think it is a growing phenomenon and reflects the importance of the comms team seeing how the business is working.

'For an in-house team it is very easy to lose sight of the bottom line and what we are in business to do. If you are trying to give advice then the mechanics of how and where you make money is obviously important. In the past, people have said that comms should be better represented at senior level. As PR practitioners, perhaps we have not done enough to demonstrate why we should have that access.

'It is about treating the relationship you have with your colleagues and the business in the same way as you would with your target media - spend time with them, create trust. If you do not have that embedded, built-in knowledge you do not have credibility.

'The insurance business is quite cyclical and understanding where you are, in terms of the long-term direction of the company, is important. This knowledge informs my discussions with journalists, for example. It can ensure that they understand the broad direction of the company. It is also a way of making sure my team is not working in isolation, showing that there are benefits to the communicators, media and the business itself.'

Spencer adds that PROs need to continually prove their worth. She has argued that her place at monthly meetings of the management board helps her team contribute to the success of the business by understanding its nuts and bolts: business cycles, sales opportunities, and so on: 'I needed to demonstrate to my colleagues that there is an advantage to me and to them. It is not enough just to bang your fist on the table and say you should be on the board.'

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