CorpComms Magazine

It was Friday night, around 6.30pm, often the trickiest time of the week for PRs and corporate communication teams. Jeff Randall, then business editor of the Sunday Times rang the corporate communications director of conglomerate Trafalgar House. He had heard there was going to be a board meeting the following Monday at which chief executive Sir Eric Parker would be fired. He had this, Randall said, 'on extremely good authority'.

Half an hour later, the phone rang again. This time it was John Jay, then business editor of the Sunday Telegraph. He had heard there was going to be a Trafalgar House board meeting on Monday at which chairman Sir Nigel Broackes would be fired. He had this, Jay said, 'on extremely good authority'.

Tim Halford, veteran of the communications industry and head of corporate communications at Trafalgar House at the time, was more than a little confused.

'In the end, I rang each of the journalists back and said they were both right. And in fact they were, as both the chairman and the chief executive resigned,' he says.

At the time, a number of people knew that Broackes and Parker were not getting on and, in the end, the situation became untenable for all stakeholders. But, the corporate communications director is often one of the first people to become aware of tensions at the top and it can be an extremely uncomfortable place to be.

'It is surprising how many chairmen and chief executives don't like each other,' says one senior corporate communications adviser.

NEGATIVE BRIEFINGS

Dislike is one thing but the real problem for any PR adviser is when board members start to brief against one another.

As one corporate communications director recounts: 'Suddenly, these rather unpleasant stories began to appear in the press about the chief executive. I discovered that the chairman had asked one of the non-executives to do his dirty work. It was extremely difficult and, in the end, the chief executive resigned.'

This type of gamesmanship has been taking place for decades, but it tends to become more prevalent when the economic environment is difficult. 'Tough times can exaggerate things. Bigger strategic decisions have to be made so any cracks on the board become more acute,' says Terrence Collis, director of communications at the Food Standards Agency.

'Sometimes the issue is personal and sometimes it relates to policy. And it doesn't just happen to the chairman and chief executive. Sometimes, the chief executive and the finance director are at loggerheads too,' he adds.

Often, personal chemistry, or lack of it, can exacerbate tensions around policy - and sometimes, the reverse is true - policy disagreements can create personal enmity.

'It is largely a bad place to be but there is usually a reason for it. From the chairman's side, it usually relates to a lack of confidence in the chief executive's ability to serve the company's strategic objectives. From the chief executive's side, it is usually because the chairman has been interfering too much,' says the chief of one financial PR agency, who describes the issue as 'highly sensitive'.

Sometimes however, the reasons can be far less uplifting. 'It is difficult when disagreements revolve around strategy but sometimes tensions arise because one person is getting more coverage than the other, more pictures in the paper, more quotes, that kind of thing. It can be tricky but you have to try to take a firm line,' says Collis.

Knowing why a disagreement has erupted does not necessarily make matters easier. 'Whatever the cause, it is always pretty hideous because, invariably, you will get caught in the middle,' says one corporate communications director, who (unsurprisingly) declined to be named.

Another adds: 'It is extremely difficult and sometimes you only realise what is going on when stories start appearing in the press that seem to be completely at odds with what you have been trying to communicate about the company and its board.'

So, what should corporate communications directors do in such situations? On paper at least, the lines of command are pretty clear. Corporate communications directors are appointed by the company as a whole and not by one particular party. But they are part of the executive team and, as such, they report into the chief executive.

COMPANY FIRST

'You are paid for by the company and your duty is to reflect company policy and communicate it externally, to convey outside perceptions of the company to the board and make sure internal communications are working properly. You do report to the board as a whole but in practice, you spend most of your time with the chief executive so it is very tricky if tensions erupt between him and the chairman. Ultimately though, you have to bear in mind the best interests of the company,' says one corporate communications director.

Most communicators agree that it is important to think about what is right. 'You want the company to be left with the impression that you have acted honourably and with integrity,' says one. This may involve keeping as low a profile as possible, trying to be neutral or even procrastinating - agreeing to communicate something to a few select journalists but failing to do so. Alternately, a more active role may be required.

'A good corporate communications director should try and oil the wheels, however subtly. You should try to nudge them both in the right direction and you can indulge in shuttle diplomacy but only if you have a good relationship with both of them,' says Collis.

'You can try to get the chairman and chief executive in the same room and make them see their actions are destabilising the company. But if you tell them to stop briefing against one another, that may make them do it all the more,' says one PR adviser.

The situation is tough and corporate communications advisers may want to distance themselves from it completely. 'You shouldn't take sides and it is completely pointless to try to work out who is going to win and align yourself with them. You have to try to be neutral,' says one.

In reality, this is not always feasible, or even desirable. 'In some places, it is obvious where the power lies and you'd be barmy to back the loser - unless they were doing something you thought was wrong,' says Collis.

CHIEF EXECUTIVE PUPPET?

Sometimes, a corporate communications adviser has no choice. He or she is employed by the chief executive and is seen as their man (or woman). 'My chief executive asked me to brief against the chairman and I refused because I thought it would be very bad for the company. The chief executive listened to me but the chairman carried on briefing against him. Eventually, I advised the chairman to stop acting in this way - and I got fired,' says one former corporate communicator.

This sounds brutal but it is often the way. The chairman frequently remains in situ  while the chief executive leaves. If a corporate communications director was hired by the chief executive and has worked closely with them, their position becomes extremely vulnerable.

'The chairman is the decision-maker of last resort and it is his job to fire the chief executive if needs be. If the chief executive is doing well, it is hard to move against him but, in most battles, the chairman comes out on top,' says one PR chief.

CONSULTANCY ROLE

PR consultants can find themselves in real demand at such times. The chairman and chief executive may each want some external perspective or help and the corporate communications director may want exactly the same thing. 'You know the elephant traps in this kind of process. You don't want it to leak because that may upset the share price. You want to know the reasons for the battle; you need to examine them to see if they stand up and if they don't stand up, you have to say so. If they do stand up, you have to act accordingly. Ultimately, if you don't agree with what is happening, the honourable step is to resign,' adds the chief.

One PR adviser says in-house corporate communications directors frequently turn to him when board battles erupt. 'They are the ones I really feel sorry for because they are stuck right in the middle. They say to me There's blood on the carpet. What shall I do? and I always say the same thing Avoid slipping in the blood.'

He suggests that really good operators should be able to heed this advice. They should try not to become embroiled in the in-fighting and should certainly not become dragged into the process of ringing up journalists to criticise either their chairman or chief executive.

'Ideally, the whole thing should remain private. The almost inevitable outcome is that one of the two jousters will be toppled off their horse and in most cases, this happens quite quickly. Sometimes advisers can get knocked off their perch too but that is just part of life,' he says.

Intriguingly, financial services organisations seem to be more prone to pitched battles at the top than almost any other organisation. 'It is something to do with the nature of the beast. They are such pivotal organisations and they are real people companies so perhaps it is inevitable that there are power struggles,' says one former head of communications at a leading high street bank.

High-profile instances include the late Lord Alexander, former chairman of NatWest, who did not see eye to eye with his chief executive Derek Wanless, while their successors Sir David Rowland and Ron Sandler also disagreed. Sir Patrick Gillam and Rana Talwar did not see eye-to-eye when chairman and chief executive at Standard Chartered and there was little love lost between Sir David Clementi and Jonathan Bloomer at Prudential.

SENIOR EXECS STEP IN

But struggles can also ensue when the chairman has a particularly strong personality or was closely involved with the company from the beginning. In fact, some corporate communications directors believe that the situation is less fraught now than it used to be. 'Post-Higgs [the corporate governance report by Sir Derek Higgs, which offered guidance on the role of non-executives and chairmen] there is a much clearer alignment of responsibilities so the chairman and the chief executive should each know what their respective role is. Also, you can turn to the senior independent director for help if war breaks out,' says one adviser. 'Senior independent directors didn't exist ten years ago.'

Seasoned communicators try to keep their ship on an even keel by pandering to the ego of both chairman and chief executive. 'You have to manage the chairman. Make sure he has all the creature comforts he needs and that he feels needed within the company,' says one PR veteran. 'If you have an ineffectual chairman, a grandee, keep him away from investors or the media and give him a good entertainment budget. If you have a strong chairman, ask his advice. He should have a more objective view of the company and it is a big mistake to ignore him, even if you were specifically hired by the chief executive.'

Nobody denies that being stuck in the middle of two warring egos is at best a challenge and at worst debilitating, depressing and downright humiliating. Often, such wars are an indication of fundamental fault-lines within the company - big disagreements over strategic direction, such as whether to expand or consolidate; whether to invest or conserve cash; whether to pursue new sectors or markets or not. And sometimes, there is too much ego, too much obstinacy and too much testosterone on display. One Alpha male has to leave the pack.

Whatever the situation, corporate communication directors should try to play a straight bat, if remotely possible. 'The main thing is to follow your instincts, keep your head down and do what you think is right,' says Halford. 

TIPS TO MAINTAIN BOARDROOM HARMONY

•    Try to be neutral

•    Try to keep your head down

•    Try not to get embroiled in back-stabbing

•    Try to avoid briefing against the chairman or the chief executive

•    Remember you are employed by the company, not by a particular person

•    Be charming to both parties

•    Try to smooth the waters

•    Seek advice from the senior independent director or external PR firm

•    Try to keep boardroom battles out of the press

•    Try to be true to yourself

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