ITL #223 PR in Brazil: when scandal hits

2 years, 8 months ago


Companies struggling to rebuild reputation and regain a social ‘license to operate’ must tackle flaws in their corporate culture. Part of the solution lies with good communicators who understand compliance issues. By Andrew Greenlees.

Brazil is currently facing the largest corruption investigation in the world. One of the country´s leading construction and petrochemical conglomerates, Odebrecht, reached an agreement with the US Department of Justice to pay the highest penalty in history for bribery in various countries. Other engineering companies have been condemned in Brazilian courts. The largest meat processor in the world, JBS, is at the center of the latest political scandal in the country.

Offshoots of the investigations have reached businesses in several areas, from energy projects to jewelry shops. Top political and business leaders are in jail. Media coverage is intense and fierce, while public opinion is deeply hostile to all those implicated.

From a PR perspective in Brazil, this is arguably the most challenging moment ever. A large number of organizations – and Brazil itself, for that matter – must look ahead and prepare for a tough process of reputation rebuilding if they intend to survive in the market. It will take hard work and a number of years until these organizations recover their ´social license´ to operate. The process is only beginning.

Compliance is the corporate buzzword right now, and not only for those caught up in investigations. A recent survey with Brazilian CEO´s and top executives showed a clear understanding that much more must be done to communicate how companies are adjusting to the new parameters of the private/public relationship which the country is experiencing.  

Strategic role in engagement

Until very recently, Brazilian PR was focused on the company´s commitment to the consumer, to technological advancements, to the environment. Now, corporate communications must play a strategic role in engaging audiences – internal and external – around new ways organizations relate to issues of honesty and ethics.

So far, according to the CEOs in the survey, companies are doing only the basics in terms of compliance communication. Most executives said they still post a Code of Conduct on the corporate website and consider the job done. Clearly there is a lot more to do and corporate communications is an integral part of this.

When contemplating the role of communication in rebuilding destroyed reputations or in publicly committing to lawful conducts, one element stands out: credibility. As an executive at a large Brazilian company currently under investigation said: “If we ever make this kind of ethical mistake again, we will be dead.” In other words, the company must ´walk the talk´.

Communication is strategic, but it doesn´t perform magic. Organizations – and especially their leaders – must deliver on their promises or face an increasingly sceptical audience.

Culture turnaround

In many cases, this process means a complete – and hard to achieve – turnaround in corporate culture. What was seen as ´part of the game´ in the past now becomes socially unacceptable (apart from being a shortcut to high penalties or even time in jail). It´s a deep dive into the organization.

Regaining credibility depends on facts not only rhetoric. Attitudes such as changing top management, creating independent compliance departments, implementing effective training and awareness programs, restructuring governance models are measures which translate commitment into reality. Brazilian public opinion increasingly expects to see these initiatives come true.

But how does PR get these essential messages across? How to engage the strategic audiences using creative solutions?

Some tactical ideas come to mind: specific training programs for employees, with a focus on creating awareness about compliance rules and informing what is expected from the teams; compliance hotlines for information or complaints; use of technology, such as content on mobile devices; promoting the topic on social media; enhanced media relations; more outreach to thought leaders and other stakeholders. A consultant recently suggested that his client transform the Code of Conduct into a quiz game available on the employees´ cell phones.

One concern about messaging is how to avoid the feeling among employees that compliance activities are actually bureaucratic hurdles set up to complicate day-to-day work. Just one more corporate headache.

Risk reduction

Rather, communication must help convince the teams that following tough rules will actually become a competitive advantage in many cases and will certainly help diminish risks in the business environment.   

Whatever the strategies and tactics, CEOs have one clear request: metrics. PR programs must include continuous reputation measuring, both internal and external. Results will steer the communication efforts towards positive results.

Rebuilding corporate reputations in the current Brazilian environment naturally calls for extra budget. In the survey, CEOs recognize this must happen. As an example, one of the largest companies facing criminal charges doubled its corporate communication team over the last two years, since investigations began.

Wider understanding

PR professionals, on their side, must prepare for this new work environment and consider it an opportunity. Business leaders point out that they can recruit good communicators or good compliance specialists, but that it´s hard to find professionals who understand and combine both.

The process is not a 100-meter race, but rather a marathon. A short or light PR program will not be enough to deal with the need for transformation. Messages will take some time to sink in and audiences will be wary at first.

In Brazil, public opinion ´condemned´ corrupt activities much before the judges did. Executives and politicians who became well-known faces on the news were confronted in the streets and airports. The media has convened task-forces to cover the investigations on an hourly basis. Reputations crumbled. Turnaround will take time, effective change, hard work and resources.

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The Author

Andrew Greenlees

Andrew Greenlees is vice-president of CDN, one of the leading Public Relations and Public Affairs agencies in Brazil. In 2009 and 2013 he was on the jury for PR at Cannes Lions. Greenlees is a board member at the Brazilian Association of Communication Agencies. He holds a Journalism degree from the University of São Paulo, Brazil.

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