Edelman’s Ethics Standards – Why Context and Oversight Matter

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Richard Edelman’s suggestions for how to rebuild trust in public relations are welcome, but will they work in the emerging world?

Richard Edelman, the head of the world’s largest independent PR firm, set forth his vision for how corporations and governments can rebuild public trust this week during a talk at the Washington DC-based National Press Club.

Entitled “The Battleground Is Trust,” Edelman detailed a number of steps. The first, “collaborative journalism”, would involve companies opening up to civil society and other stakeholders on issues they have detailed knowledge of (Edelman gave examples of Walmart on China supply chain or GE on wind power, according to the Holmes Report), as well as cutting down on corporate speak. He also spoke about the need for companies to “create a platform for employees and customers to talk openly about your company or brand. Provide the ability to rate and review the business. Allow users to voice the good and the bad, permit self-criticism, and encourage open dialogue. Listen to what they say so you can improve your products.”

While it’s good to hear an industry leader talk about the need for transparency to rebuild trust, corporates have been slow to respond to customer engagement on social media platforms and review websites such as Glassdoor. There’s already enough appraisal data out there for organizations to filter. The question is whether they’re listening or not.

The bigger issue for me is the disparity in cultures and in organizational ownership. Take for example the Middle East region, or China. In contrast to the United States or Europe and the separation between government and business ownership, many of the largest companies in the Middle East and China are government-owned. Would they willing to engage in “collaborative journalism”, and opening up their internal workings to the public? Would governments in emerging markets be willing to listen to views on how their businesses are run, views which may be contrary to their own. And who would the collaborators be? Government-controlled media? Would this engender public trust?

The first step to building trust is to understand that context matters. While I appreciate that Edelman was addressing a US audience, the PR industry must do more to better grasp cultural nuances, and adapt its thinking appropriately to serve different geographies, governance models and civil societies.

The other big headline which came out of Edelman’s speech was the idea for a “PR Compact” and mandatory ethics training. These include four tenets:

1. Insist on accuracy. Check the facts. Don’t just accept what a client tells you as the truth. Get third-party validation and cite sources. Correct errors quickly.
2. Demand transparency. Press clients to disclose their financial interests in advocacy programs and to reveal their role in coalitions. Advocate for laws that require more transparency in communications. Report on non-financial metrics in supply chains and hiring practices.
3. Engage in the free and open exchange of ideas. Create platforms that encourage and empower informed public discourse. Tell both sides of the story, and allow for dissenting views. This benefits business, shareholders, and society.
4. Require everyone to take universal online ethics training. Everyone must learn the same best practices—what is right and what is not. Tie advancement and promotion to successful completion of the course. This training should be free and accessible to all.

As a member of a number of different industry associations, I adhere to the ethical codes which these associations espouse. However, context is also key. It’s no surprise that Bell Pottinger was undone by work undertaken not in London, but in South Africa, for an entity which has close ties to the South African government. Bell Pottinger was undone by the excellent work of the South African press. In other emerging markets there is no freedom of speech (and definitely no dissenting views). And there’s no way to advocate for laws that promote transparency.

For me, there’s an urgent need to promote ethics not just in London or Washington DC, but in the up-and-coming PR hubs in Africa, Asia and Latin America. It needs a coalition of associations who have members from every level of the industry, who are international in their nature, and who can oversee ethical guidelines that are both universal and contextually-appropriate. It’s no surprise to me why this hasn’t yet happened. But I do hope someone will have the courage to push for a global ethical conversation soon.

 

VMA Insights: CEOs and what they’re looking for in today’s chief communications officer

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I’ve been doing some late night reading of a rather interesting piece of research. Commissioned by the recruitment firm, the VMA Group, the study reached out to business leaders across Europe to ask a simple question: What do CEOs expect of today’s chief communications officer?

The research looked at a number of key areas, and I’ll outline the key findings below.

  • The Value of Communications
  1. Although the value of communications as a central business operation is implicitly accepted by CEOs, many communications directors still need to make a more convincing ROI case for the impact of their own work.
  2. CEOs are still uncertain that the company’s social media activity is driven by either a strategic purpose or a clear sense of the desired returns.
  3. Reputations are more fragile than ever. CEOs frequently see this as the key value point provided by the communications director.

“We see a corporate communications director as the builder of the brand value proposition, the custodian of the corporate reputation – not in a reactive way but proactively. In order to sell our products and services, increasingly we first have to sell the company. Whether it’s government giving you incentives, or it is customers buying because they trust you. Unless you’ve got a meaningful brand proposition you can’t get off first base.

A strategic communications director understands that and understands that’s their role, and it really ought to have as much value on the balance sheet as other assets of the business because any strategic move will create stress points in the brand proposition that need to be managed.” David Lockwood, CEO, Laird PLC

  • Strategy: Is Communications Trusted
  1. Communications directors are frequently involved in strategy creation; almost always at least with some input.
  2. The Majority of CEOs actively involve the communications director when there is a demonstrably ‘communications-centric’ issue.
  3. Three core strategic viewpoints that communications directors bring to the discussion: how to translate the strategy into content and channels; and the reputational rewards and risks of strategic decisions.
  4. CEOs from multinationals see communications’ input more broadly and progressively – as a vital strategic voice in all business decisions, especially from the perspective of reputation and brand.

“I think it’s obvious that a communications professional needs to be closely linked to the strategy because what they work on – formulating the communications and regulatory environment – is of strategic importance. So communications and public affairs needs not just to be ‘part’ of the company strategy but actually linked to the strategy – wired into the board and well resourced. If it’s an afterthought you might as well save yourself the money and not do it.” Wim Mijs, CEO, European Banking Federation

  • All Change – The New Communications Culture
  1. The digital revolution has brought arguably even more significant changes to the approach and culture of communications than to the core skills of the job.
  2. The ‘message control’ model is over. Key challenge: communications professionals must somehow now find a new way to create alignment among audiences without ever dictating to them.
  3. Authenticity and transparency are the essential tonal cues today – otherwise your communications will be dismissed out of hand.
  4. Audiences expect evidence of a new type of business model – socially responsible, publicly responsive, democratically inclusive.

“We’ve noticed a big and increasing demand for transparency. Our consumers and stakeholders at Arla want to know where their food is coming from. They want transparency in the supply chain. And I would say that the balance between a ‘communications’ approach to stakeholder engagement and a ‘marketing’ approach is shifting in favor of communications. In my business, that’s manifested by an increasing preference for having very honest, authentic, transparent conversations, and moving away from grand claims, mass advertising and so on.” Tomas Pietrangeli, MD, Arla Foods

  • The Challenge of Filtering in an Age of Noise
  1. Discernment and filtering have become core skills – the ability to select from a vast and noisy information flow what is of actual value to the business.
  2. Communications professionals need to rise above the manias and mass panics the online world can create, providing a cool head in a crisis.
  3. A key, proactive part of filtering is to anticipate major disruptive events coming down the pipeline and to have a plan of action for how to deal with them.

“I don’t think anyone’s figured out quite how corporate communications works in a world where social media is on the scene before you are. Trying to control the message is really tough in that environment, of course. But it’s the speed with which other people out there react – with real-time messaging before you’ve even had a chance to get your messages out and establish the facts.” Mark Tanzer, CEO, ABTA

  • The Need for True Leadership
  1. Core technical skills are still important; they must now be supplemented by more core business skills.
  2. CEOs want more than support, counsel or executive ‘translation’ services. Businesses now need true leadership from communications directors.
  3. Proactive endeavour is the critical element – delivering new business growth, rooting out commercial opportunities, driving change internally.

“I find that communications people should be closer to the business. They should be able to understand the company figures properly – to understand the business, but also where it’s heading and what issues it’s going to face. In general, if communications people have sufficient insights in the business, I truly believe they are able to generate more value.” Paul de Krom, CEO, TNO

  • The Future: A Profession in Revolutionary Change

There’s no key findings here (I’ve highlighted the capabilities required by CEOs today in the image at the beginning of the article). However, I do want to pull up one last quote, as it’s particularly apt to the Middle East, where we have an issue with speaking truth to power and instead focusing on political maneuvering inside the organization.

Before that, I’d like to say thank you to the VMA Group for this thought-provoking report, especially the International Association of Business Communicators EMENA board member Willem de Ruijter, for handing the report out to IABC EMENA and pushing this onto the agenda.

“The communications director works in the same room in the building as the secretary of the board – in fact we are all now on one floor, we do not have separate rooms anymore. S/he has full access to everything, no restrictions. S/he is actively involved and is asked to stimulate and to give feedback. Her/his message should be frank when required… and provocative too. S/he needs to be able to tell a senior leader who has worked at KPMG for 25 years that he or she does not possess the correct KPMG vision. That takes a certain character.” Albert Röell, CEO, KPMG NL

For your own copy of the report please reach out to the VMA Group via this link.

 

 

The 3 issues today’s crisis comms professional needs to tackle

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Make sure that you’re prepared for these three big issues which are shifting the crisis comms goalposts (image source: http://www.bairdscmc.com)

It doesn’t take a genius to tell you that the world is changing, and with it the way that crises develop. I was listening to a very engaging podcast by the Gulf News business team, with communications professional Omar Qirem (check out the post here).

While the conversation touched on a host of crisis issues and triggers, there were three big issues that are relatively new, and which are shifting the crisis communications landscape.

Hacking and Emails

Long gone are the days when whistleblowers would walk out of offices with a suitcase full of papers. Today, information is conveyed electronically, and all it took for Chelsea Manning to leak hundreds of thousands of US military documents to Wikileaks was a single USB drive. Hacking is becoming a real problem for both governments the world over, as well as corporates (just ask Sony).

Hacking is developing from the well-understood concept of the ethically-troubled whistleblower to groups-for-hire who are ready and willing to hack email servers, or public domain accounts in the search of damaging information. Hackers can also attack websites and social media accounts to fake news, or even create fake sites which are mirrored on the real thing.

We’re going to have to become more aware of these threats, and develop mitigation strategies, including better security (at the very least, please use two-factor authentication as much as you can and don’t use the same password for every single account), and also educate executives on the need to communicate differently. What you write can be leaked; are you willing to see that email on the front page of a newspaper, or a website?

The Rise of Values-Based Communication

Consumers aren’t just interested in what brands make and sell. They want to know what we stand for. This public interest has partly been driven by the political climate in the US and Western Europe and by the behavior of millennials and their increasing skepticism of established institutions. For brands, value-based communications is a key point of differentiation, particularly for industries which have been impacted by technology-driven commoditization. Think of Paul Unilever’s Polman and his passionate belief in sustainability.

Conversely, executive behavior which is looked down upon by the public can have serious business implications. Whilst the official reasons for Uber being stripped of its London license were due to questions around passenger safety and drivers’ rights, the behavior and words of former CEO Travis Kalanick haven’t done Uber any good. The apology proffered by the new CEO, Dara Khosrowshahi, seems to have gone a long way to defusing some of the tension between Uber and Transport for London which oversees the company’s license to operate.

Data and Online Regulation

We’ve been living in the internet age for over two decades now, and business has benefited from a relative lack of legislation and regulation about what can and can’t be done online, particularly with data. That has slowly changed as governments have sought to understand how the internet has changed our lives. Upcoming legislation in Europe, the General Data Protection Regulation (GDPR), is going to change how corporations monitor and store data (it’s been covered in some detail by Rachel Miller for the CIPR). There’s no doubt in my mind that the online and social media networks will also have to deal with more governmental oversight. There’s been a string of scandals around issues such as extremist content on YouTube,  Facebook and the Trump election, and Twitter’s lack of action on far-right hate speech.

Whilst I’m certain that more regulation is coming, and soon, it’s far too early to say how this will change how we as communicators operate online. There will be more data-related crises, either due to how data is collected and used, or due to an inability to adhere to these new rules.

As always, I’d love to know your thoughts. What issues do we need to better understand when it comes to modern-day crises? Please do share with me your thoughts.

The PR industry needs to do much more for employees and their mental health

For many of you, the headline will be no surprise. When it comes to mental health issues, the public relations and communications industry just isn’t doing enough. A survey undertaken by the PRCA and ICCO, in partnership with IABC, across Europe and the Middle East underlines the scale of the issue that is facing the industry. Here are my highlights from the 140 plus respondents.

1. Mental Health is an issue for many of us

Mental Depression Suffering PR people

A quarter of respondents to the survey said that they had suffered from mental ill health

A quarter of those surveyed said they’d had mental health issues, the majority of them being diagnosed (either professionally or self-diagnosed) with depression or anxiety.

2. PR Practitioners don’t feel the industry is accepting of people suffering from mental ill health.

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The majority of respondents felt that the PR and communications industry isn’t accepting of people suffering from mental ill health

There’s a widespread perception among people working in the PR industry that the industry as a whole isn’t willing to help those suffering from mental ill health. A quarter did say that they felt the profession was fairly accepting, while almost half said the industry was either not very accepting or very accepting. Almost a third responded by saying they didn’t know.

3. Few Organizations have a mental health policy in place

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Less than ten percent of respondents answered that their firm has a formal mental health policy

What’s most concerning is the the apparent lack of any formal mental health frameworks or policies in place among both agencies and client-side teams. Fewer than ten percent of respondents said their team had any systems in place. I’d assume this would also extend to insurance coverage for mental health issues. If there are policies in place, it’s clear that they’re not being communicated effectively to employees.

4. Workloads up, and Stress is also on the rise

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Unsurprisingly, over fifty percent of respondents felt more stressed today than they did a year back

These responses mirror my own observations about workloads. The industry is struggling with workloads, especially on the agency side where margins are tight. Over half of respondents said they’re suffering from more stress today compared to 12 months ago, partly due to internal pressures and also partly due to client demands (this was a frequent issue that was flagged up by agency people, underlining the lack of understanding many on the client side have on agency pressures).

5. Colleagues, not Managers, are the go-to people to talk about mental health

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Employees are much more eager to talk to colleagues, rather than managers. There’s a 50/50 split on those who would be willing to talk to colleagues, compared to a 40/60 split for those who would prefer to talk to their manager.

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Management need to do more to be approachable on the issue on mental health. This may prove a challenge for some, especially if the employee believes that the manager is responsible for his or her poor mental health.

This is just a snapshot of the research that the PRCA and ICCO will be releasing today. I’d like to thank both organizations for their work, as well as the CIPR, for promoting debate on a topic which has been ignored for far too long. The PRCA will be hosting webinars on mental health and how you can best deal with this issue. The CIPR also has a host of resources online. Please do visit their respective websites to keep up to date on the issue. I hope more associations begin to understand the importance of talking about this issue, so that those in our industry who need help get it, and so that employers realize the importance of promoting mental well being and a balanced approach to how we work.

The Art of the Pitch – Advice from UAE Media on what works, and what doesn’t

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The pitch – these two words can strike fear into the hearts of a PR executive. And with good reason; journalists can tear a pitch to shreds in the time it takes you to read this sentence. Perfecting a pitch doesn’t need to be hard. But don’t take my words for it. I’ve asked four Dubai-based journalists to talk about the best and the worst pitches, as well as what advice they would proffer to people working in public relations. Thank you to the journalists who shared their answers (disclaimer: no PR people were hurt during the writing of this post). Here we go!

  • What’s the best pitch you’ve received?

Journalist 1

It was from Rachel Maher at PHD UAE.

The pitch was regarding coverage for PHD’s upcoming Brainscape conference. The theme of the year was ‘AI’. She took the time to go through my editorial calendar, factor in the deadlines, and then approach me with a few initial ideas on how we could work together. She then met for a coffee to further brainstorm and was perfectly happy to be part of another feature I had planned around AI – instead of expecting and insisting massive coverage on the event alone.

To summarize, what I liked was:

  • Factoring in the magazine’s timelines
  • Brainstorming to see what works best for the title – not just the company
  • Supporting with contacts and relevant material
  • Not expecting and insisting on exclusive coverage; instead collaborating and adding value to the magazine

Journalist 2

I don’t think there’s been a ‘best’ pitch that has stood out for me – sorry!

Journalist 3

No particular pitch is very memorable – but I’ll tell you the most successful ones were the simplest. “Hey, saw you had a story on X yesterday. Would you be interested in a follow-up/ related story.” Provided they’re telling the truth, I’ll likely stop what I’m doing to listen.

Journalist 4

Best pitch was possibly from a junior PR girl at MSL handling Cadillac, who had found the “Penalty of Leadership” ad and suggested getting the Cadillac marketing manager to write about how it resonates today. I was impressed because it was about advertising, not about the car, I’d not seen the ad, and it was a bit random. Mind you, they never filed. But I was impressed at the pitch.

  • And Worst pitch:

Journalist 1

Honestly, too many to name, so here’s are the kind of pitches that really suck:

  1. The one where they just name the client and state that they want exposure (duh!)

Getting exposure for the client is a PR agency’s job! It’s also their job to figure out how. A generic email stating that we have XYZ client and want to get them featured – without mentioning little else – is frustrating, to say the least.

  1. The one where the client wants control of everything

The client decides when, what and how, they’ll contribute without any regard for the title’s editorial style and/or guidelines. I’ve had several people call asking (rather rudely) why a comma was changed or why a sentence was paraphrased… please, let editors do their jobs!

  1. The one where the agency knows nothing

I’ve had PR folks reach out with random pitches from artificial insemination to the hottest ladies’ night out. While the latter is helpful personally, I don’t know how it’s relevant to the magazine. So, in some instances, I ask which section they’re pitching this for. Of course, the replies are sections that don’t exist.

  1. The one where they overestimate their client

As harsh as this might sound, sometimes a company/spokesperson is just not worth being featured. They don’t have anything interesting or new to offer – even if the topic fits within the editorial structure of the title. PR folks refuse to understand the shortcomings of their client and get extremely pushy by suggesting different angles and story ideas.

Journalist 2

LITERALLY everything in October that’s centers around Breast Cancer Awareness. From pink cupcakes to pink drinks to yoga on the beach, there’s absolutely no connection and it’s just a way for brands to peddle their name for the month.

Journalist 3

I am actually failing to come up with the example of a really bad pitch. I think it’s because I’ve heard so many bad pitches over the years, I assume that everything is a bad pitch; as a result, I only listen for about 10 seconds. If the PR hasn’t gotten to the point, I either ask them to get to the point NOW (if I sense there may be some usable behind the rambling) or just shut them off. If I shut them off, it means I’ve probably forgotten about them about 10 seconds later.

Journalist 4

So many! One girl pitched me the new line of Samsonite suitcases and I asked her where I should run it. “The Business News section,” she suggested. (I was on Communicate then). I told her I couldn’t find that section, so she said wherever I saw fit. I said the back page, Dish section would probably be best. She agreed. Then when I ran the conversation in full on our back page, her boss called me to say she was in tears. Should he fire her? No, I said, as she’s guaranteed to always read the mags she’s pitching to from now on. I felt like a bit of a shit, though.

  • What’s your advice to PR people re pitching to media

Journalist 1

Be considerate. As cliché as it sounds, please understand the pressures under which journalists and editors today are working. Stop wasting their time with numerous calls; a barrage of emails; irrelevant messages; and being pushy.

Be relevant. Do your research, go through a couple of previous issues (not just the most recent one), and then see how you can add value. Your job is to get exposure for your clients, not ours. Figure out how. We’d be happy to work with you, not do your job for you.

Push back. Sometimes, you know your client is wrong. Let them know. And if you can’t, don’t approach with us something you don’t believe in yourself.

Know how much is too much. I can’t say this enough but please stop calling, emailing and Whatsapping…all at the same time!

And most importantly, you don’t always need to pitch! The best PR folks, in my opinion, are the ones who are responsive, quick and present when journalists and editors need a comment or contribution.

Journalist 2

Know. Your. Audience. I don’t want to receive pitches or releases about going back to school or the latest women’s fall collection if that’s not what I write about. Also, if you’ve emailed me about something, there’s absolutely no need to give me a phone call a few hours later to see if ‘I’ve had a chance to review the email’. If something really does interest me, I will respond and take things forward myself.

Journalist 3

Get to the point. Be honest, even if you think it means I won’t be interested. Be ready to accept rejections (I’ve send emails telling me entire dept to ignore emails from a PR if – after getting a no from me – they try to go around me to another editor or reporter. Deliver on what you promise.

Journalist 4

The usual. Know the magazine. Tailor the pitch to the readers, not to your client. No one gives a damn about how market leading your client’s solutions are; they want to be informed, educated or entertained. The point of a B2B mag is to help readers do their jobs better, not to let them ignore free advertorial.

  • Has Social Media changed the pitch?

Journalist 1

This is hard to answer because I am the social media generation. I haven’t personally experienced pitches prior to social media. Having said that, for better or for worse, I don’t see the growth of social media having any bearing on the pitching process.

Journalist 2

I thankfully haven’t been pitched too often via SM, but on occasion an agency or PR person will tweet me or send a message on Facebook saying that they’d like to connect for a story or brand. It’s certainly an easier way to connect with people, but I still think it’s better to pitch something via email or phone call (provided the pitch is relevant!)

Journalist 3

Thanks to social media, it’s just gotten more chaotic because about half the industry isn’t using social media (hi, just calling to let you know I sent you an email) and the other half hits you up on random platforms I really don’t use. I get more pitches of LinkedIn, which I hate and am almost never on, than Twitter, which I am on waaay to much.

Journalist 4

Everyone used to want to see their clients in the mag. Saying I’d use a story online would always be seen as second best. That’s because they all wanted to leave it on their desks, show it to their mums, etc. Now, it’s the opposite. They all want it online, not just in print, so they can share it with their social networks.

Why we shouldn’t be patting ourselves on the back over the Bell Pottinger saga

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Bell Pottinger has fallen from grace due to its work with the Gupta family, but there are many other instances of ethically dubious work being done by PR practitioners and agencies.

Unless you’ve been living in a cave, with no cellphone connection and no newspaper rounds, there’s only one topic of conversation today in the PR industry. That is the expulsion of Bell Pottinger from the UK’s Public Relations and Communications Association for its work with the South Africa-based Gupta family. The agency was found to be promoting racial divisions through fake social media accounts in order to divert attention away from their client’s government connections and accusations of improper acquisition of wealth. Here’s a brief background, from the UK’s Guardian newspaper.

Bell Pottinger, one of the City’s leading public relations agencies, has been expelled from the industry’s trade association after an investigation found its secret campaign to stir up racial tensions in South Africa to be the worst breach of ethics in its history.

The Public Relations and Communications Association said Bell Pottinger was unethical and unprofessional, had brought the industry into disrepute and has banned the firm from its membership for at least five years.

The punishment, unprecedented for a firm of Bell Pottinger’s size, was handed down after the PRCA investigated a complaint from South Africa’s main opposition party that the PR firm sought to stir up anger about “white monopoly capital” and the “economic apartheid” in South Africa.

Bell Pottinger was being paid £100,000 a month by client Oakbay Capital, the holding company of the wealthy, powerful and controversial Gupta family, who have been accused of benefiting financially from their close links to the South African president, Jacob Zuma. Both have previously denied such a relationship.

The PRCA decision to investigate and then expel Bell Pottinger was announced following a complaint by the Democratic Alliance, South Africa’s main opposition party, about Bell Pottinger’s work.

There’s been a chorus of voices congratulating the PRCA for this decision (could they have taken any other route?), and insisting that the industry should follow more rigorous ethical guidelines.

What concerns me is 1) how any agency would have taken on a brief to harm others on behalf of a client, 2) why any body would need a complaint to be made to take action when the information was in the public domain (the story broke in Spring of this year, and we’re now into September), and 3) why is this particular case being highlighted when there’s a myriad of other client-agency relationships which should be under the spotlight.

Let me spell out some of the ethically-dubious issues that are there for all to see. We have the US Special Counsel Robert Mueller who is issuing grand jury subpoenas seeking testimony from public relations executives who worked on an international campaign organized by former Trump campaign adviser Paul Manafort as part of his investigation into the alleged Russian interference in US elections, a whole raft of PR agencies and lobby groups working for governments with poor to nil human rights (a recent example is APCO and the Egyptian government), and agencies working with firms who impact public health. Bell Pottinger’s founder Tim Bell has an interesting CV; he’s worked with the Pinochet Foundation, Syria’s First Lady Asma al-Assad and Alexander Lukashenko, the Belarusian dictator.

The industry has historically had a reputation for spinning. The father of PR, Edward Bernays, was long associated with the tobacco industry. Anyone who has worked in the industry in the region will know of the role that Hill & Knowlton played in pushing the United States into the first Gulf War through the use of a fictional story about dying babies. More recently we’ve seen agencies use fake digital and social media accounts to discredit groups, corporations or countries on behalf of clients. I could go on…

We have to face up to the fact that the PR industry has an ethics problem. There are far too many agencies who will take the business if the cheque has enough zeros. For an industry that trades in reputation above all, we have to take a far stricter stance on ethics, at least at an agency level. While I applaud the PRCA for what it has done, this is only scratching the surface. We shouldn’t start patting ourselves on the back when the job to clean up the industry has only just begun.

 

Trump’s CEOs: Why they felt having a dialogue was better than taking a moral stand

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The CEO of Merck, Kenneth Frazier, was the first executive to quit President Trump’s business councils after the events of last week (Photo: Evan Vucci, AP)

For a moment, you could hear the sighs of relief in boardrooms across America. The CEOs of blue chip firms such as General Motors, IBM, Johnson & Johnson and PepsiCo are no longer under the microscope for their response, or lack of, to the happenings in Charlottesville, Virginia last week. These executives were part of President Trump’s business advisory groups. To quote more on the story for those who haven’t been following the news, here’s the report from The Guardian:

Donald Trump was forced to disband two White House business councils that were disintegrating around him on Wednesday in the wake of his controversial remarks about the weekend violence in Charlottesville.

The Strategic and Policy Forum and the White House Manufacturing Jobs Initiative were both dissolved as corporate leaders continued to resign.

Trump claimed in a tweet that this was his decision, writing: “Rather than putting pressure on the businesspeople of the Manufacturing Council & Strategy & Policy Forum, I am ending both. Thank you all!”

The collapse of the advisory bodies follows seven different corporate leaders stepping down from the two councils in recent days including the CEOs of both Campbell’s Soup and 3M on Wednesday.

Trump had previously stated that resignations from both panels were of no consequence. “For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on. JOBS!” he said on Twitter on Tuesday.

Wednesday’s abrupt decision came after Trump confidante Stephen Schwarzman, chief executive of the Blackstone Group, held a conference call for about a dozen members of the strategic and policy forum who decided to abandon it, the New York Times reported. Executives from the manufacturing council had been due to hold a similar call that afternoon, the paper added.

On Wednesday, corporate leaders who sat on the councils raced to denounce Trump’s comments about Charlottesville and to support the dissolution of the advisory bodies. Jamie Dimon, the CEO of JPMorgan and a member of Strategic and Policy Forum, said in a statement: “I strongly disagree with President Trump’s reaction to the events that took place in Charlottesville over the past several days.” He added that he agreed with the council’s decision to disband.

Jeffrey Immelt, the CEO of General Electric, who had previously said on Monday that he would not step down from the manufacturing advisory board, put out a statement on Wednesday afternoon announcing that he had resigned.

Three members of the manufacturing council resigned on Monday after Trump’s initial refusal to condemn the neo-Nazi and white supremacist protesters in Charlottesville by name. Two more followed on Tuesday after Trump defended some of the protestors in a press conference at Trump Tower. The president targeted one of the CEOs, Kenneth Frazier of Merck, in two tweetsincluding one where he mentioned Frazier, the lone African American CEO to step down, by name.

What is most striking about the events of last week was the slow reaction of these executives, particularly from firms who champion diversity and inclusion. Merck’s CEO, who was the first to act, felt compelled to leave the council due to a matter of personal conscience.

This was a minority opinion, and may CEOs were determined to remain, despite the President’s refusal to condemn extremist hate groups. To quote from the Washington Post, some, such as the four government contractors on the president’s advisory councils — Lockheed Martin, Boeing, Harris Corp. and United Technologies — waited until after the councils had disbanded to publicly weigh in, if they did at all. Even then, several stopped short of singling out the president for blaming “both sides” for the violence at a white supremacist rally this past weekend in Charlottesville.

One example was Lockheed Martin, which offered no public statement. The firm’s chief executive Marillyn A. Hewson sent a note to employees on Wednesday, hours before the councils were folded, explaining that she would remain a member because the group’s mission “remains critical to our business,” even as she insisted that “white supremists, neo-Nazis, and other hate groups have no place in our society.”

Other, such as PepsiCo’s Indra Nooyi, personally condemned the violence, but failed to act beyond that.

Michael Dell, chairman and CEO of Dell Technologies was unmoved, with his spokespeople telling the media that: “While we wouldn’t comment on any member’s personal decision, there’s no change in Dell engaging with the Trump administration and governments around the world to share our perspective on policy issues that affect our company, customers and employees.”

So, what was behind the inability to move? Did these executives believe that it was worth remaining to engage with a President whose position on the Charlottesville events has been condemned?

The best comment I read was shared by a communications colleague online (thank you Tim for this share). Corporate language consultant Michael Maslansky stated, “The era of the fence-sitter corporation is over. If you’re silent about an issue, then each side will assume you’re on the wrong side. You end up really having to choose.”

Corporate leaders have to choose; they can no longer sit on the fence. And they have to be prepared for the backlash, particularly from a President who takes anything and everything personally. Corporate leaders also need to act individually, as the CEO of Merck did – it’s telling that the CEOs who stuck it out decided to end the council via a conference call, preferring collective responsibility over personal ownership (which seems to be a habit of corporate life these days).

I hope those leaders who didn’t criticize what happened last week finally do so. Apple’s Tim Cook has been vocal about his position. It’s time to get off the fence people, and not only say what you believe in and advocate for as a company, but turn those words into actions.