OPINION: PR specialists are ones to draft code

Investment bankers are nothing if not self-serving...

So it is hard to resist a shudder at the news late last week that their trade body, the London Investment Bankers Assoc­iation, has been asked by the Financial Services Authority to draft a code for the PR ind­ustry in the handling of price-sensitive inside information.

Whether or not the indus­try needs the code is a moot point – over the years there have been many more pros­ecutions for insi­der dealing of people working in banks and broker­ages than of those engaged in financial PR – but even if the need for a code is accepted, invest­ment bankers are quite the wrong people to draft it.

Theirs is a totally cynical attitude to PR. They see information as power and the controlled dribbling out of information as a lever in the pursuit of a deal. They have no concept of even-handedness or – more to the point – the fact that they may need the help next month of the jour­nalist they happily propose stitching up today.

Indeed, one still smarts at a conversation over­heard in a corporate hospitality suite a few months ago, where the head of one of the biggest banks in London was declaring that he could see no point in the financial press. They never wrote what was wanted, even when stories were given to them exclusively, and their influence was much less than his. By way of illustration, he claimed to have a direct line to Gordon Brown and Ed Balls and, whenever they suggested something he did not like, he simply threatened to pull his bank out of London. He had all the influence he needed without the indignity of having to treat with hacks.

Humility not being their strong suit, investment bankers hate to admit that, on any given panel of advisers in a takeover battle, it is the PR consul­tant who is likely to be the most experienced. This is not just because the likes of Alan Parker, Angus Maitland, Tony Carlisle, Nick Miles and a string of other senior figures have been working in the City much longer than the typical investment banker, but they have also been involved in far more deals.

So if a code is needed, they should be the people to draft it. There is, after all, a most recent prece­dent. The private equity and venture capital assoc­iation brought in an outsider, Sir David Walker, to draft a code for the PE industry, but most of the mem­bers of his committee are industry specialists.

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