Paddy's writing on Business, Brand and Reputation

This blog contains some of my writing on Brand and Reputation, including those on Shell - the corporation that I worked for for 37 years. Some of the articles have previously been published - others are seen here for the first time. The purpose of the website is to contribute to discussions on the role of brand and reputation management in today's business world. Please also see: http://www.roadsideretail.com/search?q=Paddy Comments welcome to me at: paddy_briggs@yahoo.co.uk

Thursday, November 25, 2004

PR Professionals should avoid the spin and help the client to tell the truth!!
It was Alex Carey, quoted in "The Public Relations Industry's Secret War on Activists", who said "The 20th century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power, and the growth of corporate propaganda as a means of protecting corporate power against democracy."

Four years ago "PR Week" magazine reported the results of a survey which asked 1,700 PR executives about the ethics in their industry. The results showed that 25 percent admitted they lied on the job and 39 percent said they had exaggerated the truth. Anyone who has worked in PR, Advertising or corporate communications knows the value of being selective in what you say. A stout defence is always that your message is not untruthful – although, of course, it may well be only a part of a greater truth. As Gerald Ratner found to tell the unvarnished truth about your products or services may be very dangerous!

In April 2004 an Email emerged in which a Shell Managing Director wrote to his Chairman saying "I am becoming sick and tired about lying about the extent of our [oil and gas] reserves and the downward revisions that need to be done because of far too aggressive/optimistic bookings." Both executives (along with some others) left Shell in disgrace and they are now being pursued by various regulatory authorities on both sides of the Atlantic. To all of us with a stake in Shell this was a shameful event – not least because of the revelation that the obfuscation over reserves was not just incompetence, but came from systemic mendacity.

It may be that we now live in a world where we expect to be lied to. We were authoritively told that Saddam’s Iraq had weapons that threatened us. It wasn’t true. We have lauded western-style democracy because we believed that the system placed limits on the behaviour of governments - Guantanamo Bay and Abu Ghraib have shown that no such limits exist. And in the corporate world we have been told that modern corporations have a sense of social responsibility (CSR) which stops them from acting like the bad old capitalists of old. But is that really true? My experience with Shell, and my study of other current corporate cause celebres, suggests that the “wicked” Henry Ford or Andrew Carnegie or Andrew Mellon probably had more deeply embedded moral values than many of today’s industry leaders.

What do you make of the statement by the CEO of Imperial Tobacco in an interview in “The Guardian” that “… the biological mechanisms between smoking and the cause of diseases are still unknown?” He suggests in this remark that he knows better than the World Health Organisation (and all other medical bodies around the world) for whom the links between smoking and cancer and heart disease are beyond doubt. He suggests it because his own self interest – and the business of his company - requires that the matter be seen as doubtful even though the reality is that the true facts have been known for a long time.

In Shell I was part of a process which formulated and distributed the Group’s “Business Principles” which included the statement that "Shell companies do not make payments to political parties, organizations or their representatives or take any part in party politics."Shortly after the publication of these principles I was in Houston where I was told that Shell in the United States ignored this rule and made donations to both major parties. And notwithstanding Shell’s problems over truthfulness this year this hypocrisy has continued. The US Centre for Responsive Politics has reported that in 2002 Shell managed to end up on the losing side by giving more to the Democrats than it did the (winning) Republicans.

Shell’s hypocrisy over political payments is, of course, sadly consistent with its mendacity over other things and yet this is a corporation which seemingly embraced CSR and promoted itself as a model of disclosure. Another example is the commitment to Human Rights in the “Business Principles”. Shell says that it to expresses “support for fundamental human rights in line with the legitimate role of business”. However Amnesty International has stated that Shell is “…implicated in environmental and human rights abuses in the Niger Delta area [of Nigeria]” and when I worked for Shell in the Middle East I was specifically instructed by the President of Shell in Saudi Arabia only to allow distribution of the “Business Principles” if the Human Rights commitment was removed.

At the extreme of corporate dysfunctionality there are corporations like Enron and professional advisers like Arthur Anderson whose behaviour was undisputedly illegal as well as amoral. Shell is in the next rank and we must await the regulatory authorities reports before making a complete judgment on the alleged venality of Shell’s executives. But it is not unreasonable to conclude that greed and pride were the deadly sins that drove Shell’s executives to do what they did. They saw their personal rewards being under threat because of poor (reserve replacement) performance and they saw their status and post Shell earning potential being put at risk from exposure of the truth.

Whilst few would argue that corporate deceitfulness of the scale that we are witnessing today is entirely new (from the Industrial Revolution onwards some businesses have operated without due regard for some of their stakeholders) what is new is the modern regulatory climate and the need not just to be seen to be behaving properly but actually to do so. When the behaviour does not match the rhetoric it not only brings the corporation into difficltulies but it brings the whole profession of PR into disrepute. We have thick skins and like politicians and the media we are used to charges of spin and of being in the propaganda business. I believe that we can be and should be part of the solution not part of the problem. This requires us not just to respond to PR briefs but to question their legitimacy. No PR person or advertising executive should be briefed to peddle untruths – but it is up to us to challenge the substance of briefs and to refuse to get caught up in the dark world of protecting companies or their executives by systematically lying about them.