Tag Archives: Fortune 500

Why Public Relations Does Not Sit at the Senior Management Table

In his keynote address two years ago at the Institute for Public Relations (IPR) 50th Annual Distinguished Lecture and Awards Dinner, Richard Edelman – President & CEO of the world’s largest independent public relations firm – echoed the PR profession’s long-standing goal: “…to elevate public relations as a management discipline that sits as a full partner aside finance, operations, legal, marketing and strategic leaders in the C-Suite.”

If the Edward Bernays era is considered the profession’s starting point, then public relations has had nearly a century to earn its seat at senior management’s table. But there are two major reasons – involving credentials and values – why PR still does not, and may never, sit there.

  1. PR Lacks Credentials: Notably, the profession has no accepted body of knowledge, and lacks professional standards of practice that are supervised or enforced. Unlike law, medicine, accounting or engineering, it’s difficult to define or validate expertise in public relations – as evidenced, for example, by the volume of information and disagreement on issues as fundamental as press release protocol. Despite PRSA’s best efforts, its APR designation does not carry the same weight as MD, JD, CPA, CFA, an MBA degree, or even a Six Sigma belt.

This credentials dilemma for PR also involves the fact that other professions such as information technology, with far less than a century of corporate membership and a similar lack of credentials, have earned a prominent place at the management table.

  1. PR Enforces Values: Ideally, public relations should function as the conscience of an organization; defining what it stands for, and working to make it accountable on that basis. Unlike any other corporate management function, the role of PR involves holding a company’s feet to the fire in terms of institutional values. Either because a particular course of action is simply the “right thing” to do (for sake of transparency, honesty or fairness), or because it may cause unwanted problems (involving morale, public opinion or legalities), it’s the job of public relations to raise its hand.

This values dilemma for PR involves the fact that many senior corporate managers who have a longstanding and secure seat at the management table and who drive most decision-making would prefer not to make their decisions with Jiminy Cricket in the same room.

Not giving PR a voice in corporate decision-making, and instead relegating its role to spinning a decided course of action or to cleaning up a related messy aftermath, appears to be the preferred approach for senior management at most corporations. At the upper end of the corporate food chain, executives whose function is listed as either Public Relations or Corporate Communications are rarely included in the Schedule 14A proxy filings as a “Named Executive Officer” by FORTUNE 500 companies. Corporate America’s NEO list clearly defines what’s meant by the “senior management table,” and the PR profession is absent by design, not oversight.

PR’s Plan to Earn a Seat at the Table

Perhaps for the first time – reflected in Richard Edelman’s stated plan to harness PR’s collective brain trust to address this issue, and the current push for inclusion of public relations in MBA school curricula – the profession appears ready to take meaningful steps to gain the corporate legitimacy it has long coveted. But these efforts will take many years to yield change, and talented PR practitioners and potential industry newcomers may consider other career paths rather than wait, thereby compounding the problem.

Regardless of size or industry, companies change direction either when they believe change will provide economic benefit, to avoid defined risks, or when they are forced to change by regulation or competitive influence. The delta between the PR function and revenue generation eliminates that rationale from consideration as a means to argue inclusion of public relations at the management table. However, both risk and regulation are strong cards PR is entitled to play in its effort to gain a seat there.

For example, to quantify the tangible value of PR, it could be beneficial for the profession to conduct research that compares the long-term stock price volatility (or beta) of public companies that include PR in its senior level decision-making process against those companies that do not. If a stock’s beta reflects market uncertainty, then a company’s track record of consistently avoiding “PR problems” as well as its ability to address those issues quickly and effectively – as a result of having a PR professional involved in operational decisions – should have a measurable effect on its stock market valuation, cost of capital and brand reputation.

Armed with objective evidence that supports the inclusion of PR as a best practice of corporate governance, the profession will have a solid platform that resonates with CXOs. Corporate America’s boards of directors may then be far more likely to require that management include PR in all strategic decisions, and issuers of Directors & Officers liability insurance might begin to factor a company’s PR discipline into pricing of its policy premiums.

To earn a seat at the management table, PR must argue its case with hard, relevant facts that will either incent or coerce companies to change. Otherwise, the keynote speaker at IPR’s 100th Distinguished Lecture and Awards Dinner in 2061 will be echoing Richard Edelman’s aspirations for the profession.

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Do Most CEOs Lack Social Skills?

Do CEOs need charm school, rather than business school?

According to a new study sponsored by Domo and CEO.com, CEOs at Fortune 500 companies are participating in social media channels significantly less than the general public. The study claims that 70% of them have absolutely no presence on social media.

On the major social networks, including Facebook, Twitter and Google+, the participation of Fortune 500 CEOs was minimal, with only 7.6% on Facebook, 4% on Twitter, and less than 1% on Google+. In comparison, more than 50% of the U.S. population uses Facebook and 34% uses Twitter.   No Fortune 500 CEOs are on Pinterest.

LinkedIn is the most popular social media site among Fortune 500 CEOs, with 26% on the network, compared to just 20.15% of the U.S. general public. Of that group, ten Fortune 500 CEOs have more than 500 LinkedIn connections, while 36 CEOs have 1 LinkedIn connection or none.

Six Fortune 500 CEOs (or more likely, their PR departments) contribute to blogs, and only one of the six CEOs, John Mackey of Whole Foods, maintains his own blog.

Given the demographics of Fortune 500 CEOs, none of this news is jaw-dropping. Older, well-established corporate guys (and gals) in the business world’s stratosphere are not wired for social media.

But here are some potential take-aways from the research:

  • The propensity of C-level executives at companies of all sizes – well below the Fortune 1000 level – to invest time on social media outlets is extremely low. Top decision-makers spend most of their day dealing directly with people within their own sphere of influence. And most C-level execs still are not convinced that social media is anything more than a technology hula-hoop that will eventually run out of steam.
  • Marketers attempting to reach and influence C-level decision-makers are still best-served by leveraging the channels that are used and respected by that target audience…including traditional business media sources and professional forums; and by seeking to influence the 2nd and 3rd tier corporate executives who provide insight and guidance for  C-level decision-makers…which may involve selective use of social media tools.
  • Aspiring CEOs may still be more likely to reach the top of the corporate ladder by joining the right country club, rather than by having 500 connections on LinkedIn.

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