Paul Holmes 26 Dec 2005 // 12:00AM GMT
Only 15 percent of the largest revenue-producing Global 500 companies have corporate communications expertise in their boardrooms, according to a new study by global public relations consultancy Burson-Marsteller.
The survey also found evidence that having boardroom-level communications expertise yields tangible business results. Global 500 companies with communications experts on their boards generally produce superior stock-market returns. In a five-year period from 1999 to 2004, companies with resident board communications expertise delivered returns of 6.6 percent per year above stock-market averages.
On a regional basis, Global 500 companies in North America, Europe and Asia-Pacific are all more or less equally unlikely to feature boardroom members with communications expertise. Only 16 percent of North American companies have communications expertise in the boardroom, compared to 15 percent in the Asia-Pacific region and 12 percent in Europe.
“As boardrooms are being held accountable for corporate behavior and commitment to act in the public interest, there is an increasing need for public relations input in policy-making decisions,” says Leslie Gaines-Ross, Burson-Marsteller’s chief knowledge and research officer worldwide. “Informed board counsel on internal and external communications is essential; it’s critical for safeguarding reputation and the bottom line.”
While 85 percent of the world’s largest global companies lacked in-depth communications expertise among independent board members, a large number (81 percent) of these leading companies include corporate communications executives on their senior management teams. However, companies in North America and Europe (92 percent and 81 percent respectively) were more likely to include communications in senior management than their counterparts in Asia (50 percent).
“There’s no doubt that senior communications executives now have a seat at the top management table – the place where policy decisions are made,” says Pat Ford, chair of Burson-Marsteller’s global corporate and financial practice.
“But as boards provide more rigorous oversight regarding the rise and fall of company reputations, communications input needs to happen at the highest level. It can’t be an after-thought once key business decisions are made and issues make headlines. As guardians of shareholder value, board members need to evaluate the context of business decisions, be prepared to counsel executives on communications and guide the company to achieve the highest credibility standards.”