The escape route

It sounds like a scene from Yes, Prime Minister. The premier wants to move ahead with an initiative that his advisers know will end in unmitigated PR disaster but their protests are silenced.

'Don't worry,' says the PM. 'If there's any problem with the media the communications department will sort it out. Doesn't Jeremy in the press office have a favour he can call in with his favourite newspaper editor?'
 
Cue canned laughter at the political folly of Jim Hacker. But in the present-day world of corporate communications, this scenario is probably too near to the truth to get a similar reaction from insiders.
 
Indeed, in-house corporate communications people and external advisers speak confidentially of chief executives who, seeming to believe in their own immortality, have similarly disregarded key advice.
 
Whether it is waving through large boardroom pay rises in a year when profits have halved or ignoring warnings about other excesses or largesse, they have soldiered on regardless, leaving advisers to sort out the very mess they predicted. Who knows if the recently scalped FTSE 100 chief executives might have salvaged their careers if they had listened to their communications advisers?
 
Victims of their own success
 
So are communications departments becoming the victims of their own success, so adept at sorting out messes that their bosses are increasingly complacent about creating problems for them to solve?
 
Some senior public relations people certainly think so. 'I do think that this is the case,' says one in-house corporate communications director at a large FTSE100 company.
 
'Maybe some chief executives almost think that they have such a good communications safety net that they can afford to do things that may be difficult in terms of their reputations and brand values.
 
'The challenge is that, rather than considering corporate communications as being an option that can sweep up the mess, reputation and corporate communications need to be considered at the point of decision-making. The evidence suggests that this is not always the case.'
 
Very few corporate communications professionals sit on boards of FTSE100 or FTSE250 companies and, while they have an increasing presence at executive committee level, the problems that some businesses get themselves into indicate that their advice is often ignored.
 
'A lot of the things that get companies into trouble are blindingly obvious to senior public relations people,' says one former in-house communications chief who now heads a financial PR agency. 'It's like being told to put out bad news on a big news day like the Budget or a company deciding that it's going to try to suppress criticism at its annual general meeting.
 
Ability to see the future
 
'You just know that it is going to rebound very badly and that you are going to be the one who is going to have to deal with the consequences when it does.' 
 
One adviser also points out that it is often corporate communicators who leave their jobs rather than the chief executive when things go wrong. He cites the departure of Prudential's group communications director Stephen Whitehead, after its failed bid for Asian insurer AIA in 2010 was criticised for poor shareholder communications, as an example. While Prudential's chairman Harvey McGrath is also leaving, in a move that one shareholder described as 'drawing a line under the failed bid', chief executive Tidjane Thiam remains in his post.
 
Boardroom pay and bonuses are also obvious battlegrounds, with several corporate communicators telling of being called in to justify remuneration increases that they may have counselled against and can certainly see as generating only negative publicity and reputational damage.
There is an infamous story about a global communications chief of a very large investment bank being asked on a conference call how the media could be persuaded to go gently on the disclosure of the chief executive's pay.
 
'It's simple,' he replied. 'Just don't pay yourself so much. If you pay yourself this much, it's inevitable that you will get bad press.' Unsurprisingly, the advice was met with a stunned silence and then ignored. 'This is an existential question for public relations,' says another external adviser. 'It is a difficult one because public relations people do not run businesses; management do.
 
Strategies are poorly thought out
 
'I regularly find myself being called in to solve matters that are not communications problems; they are matters of strategy that the board has got wrong because it did not listen to advice.
 
'The problem is that there is often no quick fix. You are never going to be able to ring a City editor and get them to pull a story just because you bought them lunch a few times or took them to Ascot and have thrown them the odd story.
 
'The best chief executives have a realistic view of what is achievable in the margins in such circumstances.'
 
Of course, when a crisis hits, nobody wants to take the blame. These are often the occasions when the thinly-veiled tensions that often exist between in-house communications teams and external advisers become much more apparent. 'This goes to the very heart of the value of having an external consultant,' says the chief executive of one major financial PR agency.
 
'The problem is that these issues are never discussed alone. The room is always full of lawyers and other advisers whose job is to say yes to the chief executive and find a way of doing what he or she wants to do because that is the way that they get paid.
 
Back up plan
 
'When you are in-house, you are an employee. If you are an external PR adviser, you are not. On fewer than five occasions in my 30 years in this industry I have actually resigned from an account because boards wanted to do something that I knew would end in disaster.
 
'Sometimes we get called for because the internal people are saying something and not being listened to and we have to say No, they are right. Listen to what they are saying. But sometimes, it is the opposite.'
 
Another financial PR agency chief goes further, saying he is convinced that communications crises arise because in-house teams are not up to the job.
 
'It is not that they are the victims of their own success,' he says. 'It is exactly the opposite. We get called in because the in-house team has made a mess of things first time around.
 
'It is certainly true that boards often do call all hands to the deck when major problems occur. 'In my experience it is at times of huge crisis that external consultants are brought in as extra support over and above the internal communications team,' says James Henderson, managing director of financial public relations agency Pelham Bell Pottinger.
 
'Usually the board and the internal team are at one in the need to get external help, albeit with different agendas. 
 
'The board wants as much guidance and advice as possible and the internal team may want the protection of external advisors in the event that the communications piece is unsuccessful.'
 
In-house and external communicators are united, however, in calling for a more enlightened approach that puts their role in brand protection and reputation management much higher up the decision-making process.
 
'The more successful companies are allowing their communications advisers to help influence decisions that have an impact on their reputation,' says one in-house adviser.
 
Custodians of reputation
 
'Chief executives need to see communications much more in terms of it helping them meet the business's challenges and recognise that they are actually custodians of the company's reputation and brand when they take decisions that affect them.
 
'Brands and reputations are more important than ever in these days of social media and 24-hour global communications.
 
'At the end of the day, when things go really wrong, it is the chief executive who will end up talking to the press and appearing on television to try to put things right. So it is in his or her interest to think about the reputational effect of the board's actions much higher up the corporate food chain.'
 
Corporate communicators must live in hope that this kind of thinking is on the increase in the boardrooms of their employers and clients, yet not all are convinced.
 
'Company executives will always do things that are in their own interests, rather than things that are in the interests of their company's reputation,' says one external adviser. 'That is just the way that these people think.'
 
Another is equally sceptical about the hubris and arrogance that can creep into even the most successful of boardrooms. 'I really don't think that chief executives are going around thinking that they can just go ahead and do silly things because their communications teams will get out of the mess they are causing,' he says. 'The issue much more often is that they don't think that what they're getting into is a mess and they don't listen to anyone who tells them so.'