News Analysis: CEOs hold the key to the boardroom

It is often the CEO who decides whether or not communications is integral to corporate affairs. But as Jane Bainbridge discovers, nurturing that relationship requires a balance of coaxing and confrontation.

In an era when the miscommunication of a company's message can have a knock-on effect on everything from product sales and share price to consumer activism, the relationship between the CEO and comms director has never been more important.

But despite the speed with which events can be reported and the impact they can have, only 25 per cent of comms directors for FTSE 100 companies have a place on the board or executive committee, according to research commissioned by The Communication Directors' Forum.

The research involved an online survey with 93 professionals, plus in-depth interviews, and was carried out by reputation analyst Echo Research.

It will be presented on board the cruise liner Oriana for the forum (8-10 June). In fact, only 35 per cent of respondents thought the board understood the business case for PR at the top 'very well'.

Business acumen

If so much needs to be done to get corporate affairs recognised at the top, what can comms directors do about it? Echo Research consumer practice director Peter Christopherson says: 'For people who aspire to the executive team you have to have a really good understanding of your business and you don't get that by being a comms expert. It's about what makes the business tick, reading balance sheets - having a good grounding in the business side of the organisation.'

This is a sentiment with which Hilton Group corporate affairs director Alex Pagett concurs: 'Comms directors have to understand the business we're in. We hit more people more quickly more often than ever before, so we need to adapt to that. People need to establish a good understanding of the decision-making processes in the business, from government to City activity,' he says.

Dixons group director of corporate affairs Kai Boschmann says: 'It's about delivering insights to the business. You need to speak the commercial language of the business.'

But perhaps the biggest factor in determining whether comms chiefs attend the executive committee - ahead even of the business acumen of the person - is whether the CEO wants them there. For it is the CEO who moulds a firm's culture and determines how much status comms is given.

Camelot director of corporate affairs Mark Gallagher, who has just been promoted to the board, says: 'I've been lucky in working with chief executives who've recognised the importance of corporate affairs. It boils down to the nature of the personal and very intimate relationship between the comms director and CEO. If corporate affairs is taken seriously then the comms director is likely to be that company leader's closest confidant. Their personal career development is aligned with the performance of the company they lead.'

But the potential downside of this close alliance is that if the CEO goes, the comms director is likely to follow. From Echo Research's work, it also seems that there are certain types of company more likely than others to hold corporate affairs in high esteem. None of the main domestic energy providers has its comms director on the main board and only five out of 13 put them on the executive board. This compares with all the telecoms companies having representation on the executive committee.

'Telecoms firms by their nature need to innovate and communicate. Energy firms have a more defensive role and often deal only with bad news, so they don't see it as a board function,' notes Christopherson.

The right culture

But the survey suggested that even PROs with the right flair and determination nevertheless face a tough challenge to turn around a company culture and make the case for better recognition for their department. 'You need to have a company where there is a culture of communications, and the CEO is often vital to that relationship - they allow the comms chief onto the board,' says Christopherson.

And if the CEO is not interested, Gallagher thinks the solution is obvious: 'If corporate affairs is central to performance but the company doesn't acknowledge that then you shouldn't take the job. You choose your CEO as well as the company. Your job is based on a heightened form of personal advocacy and you have to genuinely believe in what that company is doing.'

Having the ear of the CEO in the role of 'guardians of reputation' or 'keepers of the brand' means there are times when the chief executive has to be confronted. As Diageo corporate relations director Ian Wright puts it: 'Chief executives are among the most terrifying people in the world. Our job is to stand up to them.'

While some top in-house communicators think too much importance is put on the reporting line at the expense of adding value to the business, there is universal agreement that communications is a job that clearly can not be done while being kept in the dark.

'It's impossible to do the job if you're not au fait with the strategic thinking and aspirations of the group. You can't communicate effectively what you don't understand,' says Pagett.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in