ITL #447 Good governance: what PR professionals can bring to the boardroom3 weeks, 2 days ago
Amid the growing importance of ESG, the time is right for communicators to broaden their knowledge and aim for a seat at the top table. By Sandra Sinicco.
The 21st century has given us plenty of business scandals. In response, we've seen a direct increase in governance initiatives inside companies of all sizes as they work towards greater longevity, seek to prevent future issues and guarantee better working practices.
Most people remember or were directly impacted by the Lehman Brothers scandal of 2008, when this major US investment bank conceded high risk mortgage loans and subsequently went bankrupt. The Dow Jones Index plummeted, causing huge stress in the markets. But this is far from the only scandal we can name. In the same decade, giant company Siemens was caught up in corruption practices in Nigeria, while Shell overvalued its oil reserves by 23%, generating wrong information about its profits to the markets. And let’s not forget the scandal of Enron faking its numbers.
Sadly, the list is long. And the general perception is that such things wouldn't have happened if companies had better governance and kept good practices, respecting their stakeholders.
In a world of connected economies and communications, reaction to the exposure of these malpractices was strong and relatively fast. Beyond facing financial and brand image damage, companies had to rethink their practices, their actual commitment to the values they claimed to follow and had displayed in fancy receptions and on their websites, and go back to the drawing board to rewrite their managerial profiles and habits.
Globally, companies and their investors started to experience a shift in several corporate practices. It is also worth mentioning that the impacts of climate change became more noticeable, adding another fundamental element to the long list of changes needed. It is not surprising that ESG (environmental, social and governance) has become the word on everyone's lips.
New opportunities for PR
What we are able to observe today is that this new situation opens up new opportunities for Public Relations professionals working at senior level, who previously were usually restricted to technical and operational delivery of their knowledge. Now, these professionals can apply to be a part of the many Boards and Committees inside organisations that are seeking more diversity and different skills in order to meet sustainability targets.
Although once restricted to the role of managing communications with different stakeholders in activities that followed macro strategies defined by the Boards, senior public relations and communication professionals, who have a wide array of distinct experiences within their profession, can now have the opportunity to contribute with trends analysis, macro-overviews, behaviours and brand protection information that is highly valuable to the Boards. This is a different relationship to that based purely on providing PR services. The Public Relations expert and Board member will need to commit with transparency. Not hiding realities, but instead stimulating their peers to improve the company's realities in direct alignment with its values, making use of all their communication strategies and skills.
Sustainability, corruption, fraud, abuse of short-term incentives for executives and investors, as well as the complexity and multiplicity of relationships that organisations establish with a variety of different audiences are some of the topics that Boards often address. Within the Board, all of these subjects need to be aligned with the values of the company and committed to a sustainable and healthy environment for all stakeholders. Seasoned Public Relations professionals can play an important role in strengthening and disseminating the principles and values at the heart of the Board and organisation, because this ability is in their DNA as professionals.
The increasing transparency of organisations is another shift that is here to stay. It means that the public relations professional, instead of being pushed to ‘protect’ the brand, will have to push the company to present numbers and impact measurements, coming up with data that translates actions into numbers and financial impacts that can be understood by all members of the Committees and Boards. Senior PR professionals can certainly contribute to the improvement of policies that increase transparency and give cohesion between practices and theory.
Goodbye to hiding skeletons
It’s time for companies to go beyond the basics of just presenting financial statements or following existing rules and laws. There is a need to provide relevant information to different audiences by assuming that this is the right principle to follow to achieve long term sustainability. The era of receiving orders and hiding skeletons in closets is coming to an end, from top to bottom. Having a skilled PR professional sitting on a Board helps the company achieve the level of transparency needed, with constant connection to the values and all the company stakeholders.
Even if joining a Board might pose a big challenge for Public Relations professionals – for example due to a lack of expertise in finance, accountancy, or other key subjects – it does not mean that it is impossible. PR professionals will need to study and add more knowledge to their portfolio.
They must learn to interpret corporate balance sheets and understand the business in depth. This knowledge is mandatory, even at a time when institutions are requesting Board members who are diverse and very proactive.
Adding more business knowledge opens up interesting opportunities to strengthen the work of protecting brands through the dissemination and preservation of values. Having an active voice, with the same voting power as areas traditionally considered a priority in companies, completely changes the game for PR professionals globally.
Sandra Sinicco is CEO of GrupoCASA, a PR consultancy established in Brazil and the UK. She also founded the LatamPR network of independent agencies covering 14 countries in Latin America and was one of the founders of Abracom, the Brazilian Communications Association.mail the author
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