Questioning "shareholder value," PR ethics, global
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Questioning "shareholder value," PR ethics, global

Paul Holmes

Joe Nocera of The New York Times attempts a takedown of the primacy of “shareholder value,” suggesting that the capitalist system provided far greater—and broader—benefit to society before shareholder value “became the mantra of the business culture.” The results, he says, are “not pretty. Too many chief executives succumb to the pressure to boost short-term earnings at the expense of long-term value creation.” The argument, which ties the focus on short-term profits to the financial crisis, seems so obvious that it shouldn’t really need making; having said that, it’s hard to imagine either CEOs or the legislators and regulators who are in the pockets of those CEOs, changing a single thing. With characteristic even-handedness and cool-headedness, Neville Hobson acknowledges the problems with public relations ethics and media manipulation, but comes to a conclusion similar to my own, that self-regulation is a more likely—and better—solution than regulation. Says Hobson: “It seems to me that this is the moment for professional associations such as those I mentioned earlier to be handed the golden opportunity to put their money where their mouths are… [and] voluntarily put their member-houses in order as far as ethical behaviors are concerned.” The main difference between Neville and my own view: I believe any action is more likely to come from leading agencies rather than association. Most surprising research finding of the week: global warming is real. That’s surprising not because it runs against the scientific consensus—obviously, it’s entirely in line with what every serious climate scientist has been telling us for decades—but because it comes from outspoken climate skeptic Richard Muller of the University of California, Berkely, and because his research was funded by the climate change denial movement’s paymasters general, the Koch brothers. Not that anyone should hold their breath waiting for the finding that “global warming [is] real and that the prior estimates of the rate of warming were correct,” and that “humans are almost entirely the cause” is likely to result in any policy change. Least surprising research finding of the week, from Credit Suisse: companies with women on their boards of directors outperform companies with all-male boards. “Companies with one or more women on the board have delivered higher average returns on equity, lower gearing, better average growth and higher price/book value multiples over the course of the last six years.” John Cridland, head of the Confederation of British Industry, has responded to a recent wave of corporate scandals by suggesting that companies need to “live their values.” The cynic in me responds by suggesting that the current situation came about precisely because companies like Barclays (the most obvious current example) have in fact been living their values—the real problem is that those values are hopelessly corrupt. Bailout beneficiary AIG is mounting a YouTube campaign to tell its story to the American people and publicize its promise to pay back the public funds it received with interest. The videos aren’t flashy, which is probably a good thing; new CEO Robert Benmosche appears to be saying and doing all the right things; and at least the company resisted the gimmicky, superficial name-change approach to reputational recovery. ThinkProgress takes note of the contrast between Fleishman-Hillard’s commendable inclusivity—“gays and lesbians rank among the most powerful, loyal — and largely untapped — consumer markets across the globe; we understand how to reach this community because we’re a part of it”—and the bigotry of its Boy Scouts of America client. Fleishman, I think, gets its response to questions about the contradiction pretty much right: “While our policies and perspectives differ on this subject, we support the Boy Scouts of America’s vision of preparing American youth to become responsible citizens and leaders, and we work with them on communications programs to support this vision.”
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