Tag: CSR

Should PR Expertise Be More Evident on Corporate Boards?

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This morning I presented some of my research about the presence of public relations on corporate boards. I’m presenting at the International Public Relations Research Conference in Orlando, and I’m sharing here a summary for this week’s Penning Ink post. 

I started thinking about the notion of PR on corporate boards because of reading more and more about corporations and Corporate Social Responsibility (CSR), ESG (Environmental, Social and Governance) factors in management and investing, and of course Diversity, Equity and Inclusion (DEI).

All of those concepts are also discussed at length among public relations professors and professionals. It all relates to Stakeholder Theory, in which public relations as a function is concerned with all those who have a stake in, and can be affected by, an organization’s activities. CEOs are writing books about stakeholders, corporate purpose and related concepts. So with all this corporate emphasis on topics about which public relations professionals have developed interest, experience and expertise, I began to wonder about two fundamental questions:

1. Do corporate boards have members with public relations expertise?

2. Do corporate boards have committees focused on CSR, ESG etc?

I realized that how a board and its role is perceived can be a factor. Agency Theory would say the board role is monitoring executives. Resource Dependency Theory states that the board role is providing resources to a board and in turn the company. Either way, some PR savvy in our current climate would seem to be an asset to a corporate board.

To look into this, I examined the “Fortune Modern Board 25’” – companies that “ranked high on factors including expertise, diversity, and independence of board members as well as company ESG scores”. By that standard, this group of companies would be likely to value public relations expertise. I used publicly available date on company websites, annual reports, and LinkedIn profiles of board members. I looked at backgrounds of their board members and the mission and descriptions of their committees. 

Results:·     

  • Of 285 board corporate board members examined, 7 had PR-related experience
  • The PR experience was in government relations, community relations, serving as a chief marketing officer (CMO) or responsibilities for corporate communications
  • None had degree in public relations or accreditation (APR)
  • There were 110 total board committees for 25 companies; average of 4.4 per company
  • 10 of the committees had a focus or charter related to PR
  • Those committees with charge related to PR included environment, social, social responsibility, sustainability, corporate responsibility, consumer relationships, public affairs or public responsibility
  • The most common board committees were audit, finance, nominating, governance, compensation and leadership development

So, there was not a significant presence of PR either among board member backgrounds or the focus of their committees. I see three potential explanations for this as well as scenarios for the future of PR capacity on corporate boards:

1.     CEOs and board members and/or committees seek counsel of CCOs or other staff with PR a degree or experience. This may be something to study in the future to see if PR experts are involved at least in some way counseling companies on CSR, ESG and DEI.

2.     Board nominating committees recruit members with PR skills along with finance, law, and other traditionally favored backgrounds. In other words, they see the board role as not just about the industry they are in and the finances, but other factors in which public relations perspective is vital.

3.     Or, sadly, we may see a remaining status quo where boards seek and nominate members who look like themselves. They will see PR as something anyone can “do” and not as a unique management function in its own right. 

But we can’t wait for boards to act. Public relations professionals, in the academic language, need to “enact” a managerial versus tactical role and demonstrate their value to boards. For years, PR professors and professionals have claimed the profession needs a “seat at the table.” That table has been the C-suite; in the future it should also include the board.

PR needs to push CSR over CSA

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Let me start by apologizing for the acronym soup in the headline. Let me explain. Public relations as a profession needs to stress Corporate Social Responsibility (CSR) and resist the increasing push toward Corporate Social Advocacy (CSA).

So now, let me explain my explanation. I have been thinking a lot about the role of public relations in social responsibility and social advocacy in recent months. I’ve read books and attended webinars and talked to lots of people. What follows is a condensed summary of how I came to my own opinion articulated in the first paragraph.

CSR Appropriately Stresses Responsibility to All

CSR has a long history and has been discussed much in trade publications and academic literature. A brief and accessible history of CSR traces the concept back to the 1800s. Mean while, academics have often cited the more formalized Carroll’s Pyramid of CSR, which states that businesses have four responsibilities–economic, legal, ethical and philanthropic. Today, companies are so engaged in CSR that news of it is aggregated on CSR Wire. The evolution of CSR has blossomed today to include formal and transparent attempts to measure and verify CSR efforts (to avoid greenwashing and image over reputation) such as the B-Corporation movement.

Tangled into all of this is the notion of stakeholders. This means that it is an imperative that businesses not think only about profit, but consider all of the people who could be affected by their success or failure. Here too,. Stakeholder Theory is not new, dating to 1984, and asserts that organizations need to understand and respond to the interconnected relationships between and among various publics. I’ve always considered this fundamental public relations, but it has gained currency and attention in recent years.

At several recent conference sessions, webinars and blog posts of the Arthur W. Page Society, there has been a healthy debate about the very term stakeholder. Judy Samuelson, executive director and founder of the Aspen Institute’s Business and Society Program, and author of “The Six New Rules of Business: Creating Real Value in a Changing World,” spoke at a Page conference and webinar and wrote a blog post about her objection to the term stakeholder. Essentially, she views the term as too generic and says employees are the company and more than a stakeholder.

Page President Roger Bolton wrote a blog post in response, asserting that all stakeholders, including employees but also customers, investors, communities, need to receive value from companies and their interests heard and balanced with those of others.

Outside of this intelligent debate on stakeholders and the meaning of CSR, others have been striving to give a more clear and universal understanding of what it means for a company to be socially responsible. Some, like Christopher Marquis in his book “Better Business: How the B Corp Movement is Remaking Capitalism,” assert that the old economic “externalities” isn’t enough. In other words, businesses often say they avoid negative externalities or generate positive externalities–meaning harm or benefit to publics or stakeholders beyond the company itself. But a better concept is “interdependencies,” which removes the focus from positive or negative consequences of an organization working autonomously and stresses that corporations need to work collaboratively with stakeholders.

All of the above is good and interesting, but what happens when a company takes a specific position on a controversial issue?

CSA Dangerously Takes the Side of Some Over Others

A more recent trend of discussion in the field of public relations and among chief communications officers (CCOs) has been the notion of corporate purpose, and the extension of that is corporate advocacy (CSA) or even activism.

The Institute for Public Relations recently hosted Fred Cook of Golin and the USC Annenberg School of Communications to present their report on the Future of Corporate Activism. In the report, research shows that 77% of PR professionals say polarization is a problem for them doing their job, more think corporate activism is good for the brand. But the professionals also think three issues is a maximum number of social causes with which to associate, and that there is a risk so any activism has to be done in a way that is “unifying and humanizing,” in Cook’s words.

Meanwhile, another Page Society webinar was with Fortune Magazine’s Alan Murray, on the occasion of the release of his new book “Tomorrow’s Capitalist.” Murray interviews many CEOs and concludes they think very differently about their jobs now than 10 years ago. He points out that there is no tradeoff between purpose and profits, and that it took 100 years to come up with metrics for shareholder value so we will arrive at good metrics for stakeholder value.

Murray also said that thinking long-term is key. While there might be loss in profit in the short term over taking a stand on an issue, that trade-off is diminished over time. Part of the reason for this may be that 85% of the value of a Fortune 500 company today is in intangibles as opposed to physical product and property.

There is also a significant pushback against the whole wave of corporate activity in the social justice sphere. Vivek Ramaswamy, an entrepreneur and CEO himself, argues forcefully that many corporations’ actions in response to social issues are insincere, a cow-towing to “woke’ pressure and constitutes a “scam.’ Those are strong words, but you should consider his argument in his book “Woke, Inc.: Inside Corporate America’s Social Justice Scam.”

Coming to Consensus

Having considered all of the above, and the decision on whether a CEO or company should take a stand on an issue or become a corporate activist on the social cause du jour, I have a measured response. I don’t think any company should jump on every issue or come to a judgment too quickly. Consider the mess Disney got itself in. Or consider the recent Supreme Court leak of documents regarding abortion law. Many PR firms and CCOs are counseling CEOs to say nothing on that issue. Sometimes polarization is a lose-lose proposition. We need to consider that stakeholder groups can be at odds with each other–eg. employees having differences with customers–but also there can be division within groups–such as some employees being pro-life and others being pro-choice.

I asked Murray if tolerance and respect for diversity of opinion and nuanced corporate statements would be acceptable these days. He said, “good question, it’s hard, and requires thought and strategy.”

This is why I like Paul Argenti’s view of corporate activism and speaking out on issues. It is more rational than emotional, and thus strategic. His article in Harvard Business Review offers a good framework for taking each issue, one at a time, and seeing if it aligns with corporate values, purpose and most importantly practice before jumping into the fray.

My bottom line? Responsibility means listening to and considering all stakeholders and balancing their interests. It is fundamental public relations, consistent with stakeholder theory.. Advocacy means choosing some stakeholders over and against others. The question isn’t just what stance to take, but whose? Strategy and ethics both require considering the difference carefully. CCOs should always counsel for social responsibility, but be very judicious about counseling for corporate advocacy or activism.

How to decide if your company should take a ‘stand’–some theoretical guidance

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A hot topic among PR professionals is whether or not to counsel their CEOs and others in management if the company should take a stand on current social issues. The trend has been moving in that direction, but some are hesitant to polarize their stakeholder groups or fall into mission drift.

A recent article in the Journal of Public Relations Research (subscription required) offers some guidance and proposes a research-based theoretical model. (Disclosure: I am on the editorial review board for this journal but did not review or participate in this article in any way).

Authors Cheng Hong and Cong Li of California State University Sacramento and University of Miami, respectively, developed a model after conducting a survey of 555 random participants about their intention to support or boycott a company based on their association with a social issue. The academic term for what they studied is Corporate Social Advocacy (CSA). They define this as

“a public relations initiative in which a company and/or its CEO expresses an opinion/stance on a sociopolitical issue that is unrelated to its business considerations.”

The key for me in this definition is “unrelated to its business considerations.” It would be obvious if a food company like Kellogg takes a stand on nutrition, or Starbucks takes a stand on supporting local coffee farmers, or Dick;’s stops selling guns. But when the social position goes beyond product or service category, that’s when things can get confusing and be cause for alarm.

There will always be some consumers who buy a product or service regardless of the sociopolitical stance a company takes on these unrelated issues. I heard several CCOs say this recently on a podcast. Meanwhile, however, there is increasing evidence that many consumers make purchase decisions in whole or in part based on the company’s posture on everything from gun control to climate change.

To try to cut through this clutter of considerations, Hong and Li developed a model. They admit the model may be limited and need further testing because they focused on one issue–same-sex marriage. But it is a good step toward developing a more robust theory.

The model includes several variables:

  • consumer-company congruence–when people and the organization share similar fundamental characteristics and values;
  • company-cause fit–when an organization takes a stand on something that is reflected in its corporate values and actions;
  • consumer-cause fit–if the consumer finds a cause relevant or important to themselves personally.

The study found that all three variables if at a high level would make a boycott less likely and increase purchase intention and corporate reputation.

The application, therefore, involves key considerations of relevance and authenticity. Taking a stand on a social issue– even if unrelated to product, service or other business considerations–will be a good move among consumers and other stakeholders who are of similar values, if the issue is relevant to the consumer, and if the company is acting authentically and not just issuing statements.

West Michigan Firms Win Awards for ‘Good’ Advertising and PR

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It is interesting to me that a conversation with students about certain professors in other major programs bad-mouthing the ethics of advertising and public relations coincided with news of two local West Michigan firms that earned awards not only for their work, but the fact that it exemplifies socially conscious communications work.

In my spring Fundamentals of Public Relations course, during a discussion of ethics in public relations, several students complained that professors in other courses labeled PR or advertising as nothing short of evil. While it is good to have students consider the negative consequences of some  in the field, it is also paradoxically unethical for someone from outside the field to make such a broad brush stereotype declaration about an occupation. It’s what scholars call a synecdoche, in which a part (or one bad example, often of someone not even in PR) serves as representative of the whole profession.

So I was delighted to learn of not one, but two West Michigan firms recently lauded for their ethical and socially aware practice.

First, the Image Shoppe became the first marketing firm in Michigan to be certified as a Benefit Corporation, also called a B Corporation.  Basically, a B Corporation is one that meets rigorous standards we in PR call the “triple bottom line” of sustainability, which includes positive impact on the “3 Es”–economic, equity, and environment (some also use the “3 Ps” of profit, place, people). Learn more about this award in this RapidGrowth article.

Then just last week, Lambert, Edwards and Associates earned a Silver Stevie Award in the Corporate Social Responsibility (CSR) Program of the Year category. The award is part of the annual American Business Awards.  LEA won the award for its 10,000 Scoop Challenge cause marketing program that was created for Denali Flavors, the developers of the legendary Moose Tracks® ice cream. The campaign combined grassroots networking, experiential marketing, media/celebrity engagement, media relations and product sampling into one event. Attendees are encouraged to help eat ice cream for a cause, with every scoop eaten, Denali donates $1 to the local chapter of The Salvation Army, with the goal of raising $10,000 in a four-hour window.

We celebrate creativity and meeting business objectives in our field, and we laud local examples of excellence. It’s good to know that we have local firms who are also leaders in terms of not just doing good work, but doing work that does good.

Should Your Company ‘Brag’ About Its Good Deeds?

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A news release about local hospital caught my eye as I was trolling news apps and social media. “Metro Health Named One of the Greenest Hospitals in America” was the proud headline.

There is no doubt that organizations of every stripe issue news releases to tout their success. There are even special newsfeed like CSRWire dedicated to being a clearing house for news about various forms of Corporate Social Responsibility, a hot topic in public relations for years now.

But I got to thinking about this one given some recent research I read about what consumers want to know about companies’ CSR. Yes, it would seem to be good for consumers to know that companies are doing “good” in addition to just making and offering good products and services. But is it seedy for companies to toot their own horn?

CSR was the topic of a 2014 special issue of PR Journal, published and available for free online at PRSA.org. One of the articles asked my question exactly: “Public Expectations of CSR Communication: What and How to Communicate CSR.”

The results are interesting and helpful to PR academics who want to further research this area, as well as to PR practitioners who can use the study to be more nuanced and strategic in the ways they share their company’s and clients’ CSR activities.

Here’s a breakdown:

  • consumers want mostly to know “who is benefiting” from the CSR activity. So PR pros should not write to make corporations central to the story, but to tell stories of improved lives or environments;
  • as far as sources of information, consumers preferred most to hear directly from beneficiaries, with the CEO or PR spokesperson the least preferred. In general, non-corporate sources were preferred over corporate representatives. So PR pros should quote or otherwise give voice to the publics their CSR efforts helped, and let the CEO and themselves be silent or a minimal part of the story;
  • in somewhat of a surprise, consumers liked to hear about CSR more from company controlled media like annual reports, social media, web sites, newsletters and so on as opposed to news media or expert blogs. My guess is this is as much about accountability and detailed information than it is about a particular source preference. But it is worth noting.
So the bottom line is that the news release I saw may be ok, since it was directly from the company and in fact quoted a third-party ranking of the hospital’s green efforts, and it stressed the community benefit. 
For everyone else, don’t play faux humility about CSR efforts, but also don’t be too self-righteous. Strive for that middle ground where the company is in the background and the beneficiary is the star. Also, don’t think media relations is the best when consumers are looking to your “owned” media for CSR information.
When it comes to doing good, it really is nice to share.