ANALYSIS: Rekindling the flame of public approval

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

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

general public.’

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.’

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