Armed with the new PR strategy of actually listening to the views of its
shareholders, British Gas is hoping to rescue its ailing reputation
before the proposed split of the utility later this year
A decade since Sid was told about privatisation, British Gas has become
the company the media loves to hate.
According to the Presswatch review of national newspaper coverage in
1995, the utility came bottom of its league of 1,684 companies with a
perception score of minus 9,456.
Yet its AGM last Tuesday passed without fuss. These things are relative
of course. Media attention was still focused on chief executive Cedric
Brown’s retirement package rather than future direction, but compared
with last year’s fiasco when 5,000 shareholders and a 40 stone ‘Cedric
the Pig’ descended on London Arena, it was a smooth-running affair.
So has the tide turned? Is British Gas at last rebuilding its
The company does seem to have taken a disproportionate share of flak.
Chairman Richard Giordano admitted that the company had become a
‘lightning rod’ for criticism of privatised industries.
Cedric Brown’s 75 per cent pay rise in spring 1995 was only the start of
its problems. In June, 2,000 British Gas employees were moved from
London to Reading, while Brown and his team took plush new offices on
The Strand. The Guardian’s Pass Notes was typically cutting: ‘Mr Brown’s
salary is 47 times that of an average British Gas showroom worker. Don’t
you love being in control?’.
The decision that Brown would not join a new directors’ incentive scheme
in October suggested that they were learning, carefully avoiding the re
ignition of the ‘fat cat’ pay row.
But at the beginning of this year the announcement that Brown was to
stand down - surely a top PR opportunity - was mishandled. Not only was
he given a ‘golden handshake’ that looked as obscene as his pay rises,
but a press conference announcing the company’s demerger ended in
pandemonium as Brown unsuccessfully attempted to avoid the media mob.
Moves since January suggest that Brown and Giordano might have felt let
down by their communications team.
April saw the appointment of former Shell UK corporate affairs chief
John Wybrew to the British Gas board, over the head of its corporate
affairs director Peter Sanguinetti. Shandwick Consultants were appointed
in March to work on the company’s planned restructure and the services
of lobbyist Ian Greer Associates were dispensed with along with those of
Sir Tim Bell’s PR firm Lowe Bell Consultants, although Lowe Bell
Political remains on board.
Wybrew refuses to comment on past mistakes but his tone suggests a
spring clean of PR strategy: ‘The AGM was the first step in the
communication of our business future. AGMs are high wire acts and
success will depend on the confidence of key players. There’s a new
sense of belief in our team.’
Wybrew and Shandwick’s influence were apparent in last week’s event,
running to only two and a half hours, compared with more than five in
1995. The organisation was slick and Andrew Cave of the Daily Telegraph
identified the containment coup of holding the meeting at 10am on the
edge of the NEC complex.
Robin Hepburn director at Shandwick Consultants said: ‘The event was
meticulously planned to handle the issues shareholders were likely to
bring up. We were very satisfied with the outcome.’
Over the first hurdle, Wybrew and his team now face a year preparing for
its primary communications challenge - the proposed split of the utility
into two independent companies. Its assets (exploration and pipelines)
will be managed by a company provisionally called TransCo International
and its liabilities (gas trading and supply) by British Gas Energy.
The first stage will be the announcement of the management structures
for the proposed companies later this year. The exercise will culminate
in the presentation of plans to shareholders in an Extraordinary General
Meeting scheduled for spring 1997.
The company must avoid the pitfalls of the past. Central to this will be
the anticipation of the PR implications of business decisions. The
appointment of a board-level communicator suggests a genuine commitment
to this. At Shell John Wybrew developed his approach of integrating
strategic planning with corporate affairs and believes this will be
central to success at his new employer.
‘The concept of ‘spin doctor’ is the absolute antithesis of what we’re
trying to achieve,’ says Wybrew. ‘Our aim is to articulate the reality
of what we’re attempting to achieve, crossing the barriers of jargon and
complexities to communicate the simple messages that are required by the
The media and the public demand simple answers to complex business
issues. They also require companies to be more socially accountable and
their chiefs to be personally answerable. Consequently the performance
of senior figures will play a critical part in forging reputation,
though Wybrew is quick to point out that all managers will be
responsible for communicating their specific areas.
They’ve got their work cut out. British Gas faces some highly
controversial issues such as a professed desired to reduce the number of
small shareholders, a rising number of complaints and the looming crisis
over take or pay contracts.
Roland Gribben, business editor on the Daily Telegraph, says: ‘With
Cedric out of the news, attention will switch to the company’s business
performance and regulatory issues. It will encounter further banana
skins and must be more alert to problems. Moreover it must tell the
truth and be open about its difficulties.’