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May 23, 2008
Dear John
I wanted to respond to your letter of May 5. Since you have provided approval to do so in a public manner, I am posting both on my blog. You raise important issues of ethical standards and business conduct that are relevant to the entire PR community. (Disclosure: Business Roundtable is an Edelman client).
On your first point--the issue of commercial competitors being represented by a given PR firm, whether for product marketing or corporate reputation--you posit correctly that “these are the easiest conflicts to avoid.” The standard must be “disclosure and protection.”
The question that remains is how to define a conflict. Is the relevant criterion presence in a category or is it a head to head competitor? Can a PR firm be held to a global exclusivity when the client only assigns a brand in a given market? Similarly, should a client asking a firm to conduct product marketing assignments assume that the firm should rule itself out of employee communications or public affairs assignment for a competitor? I suggest that conflict should be considered in the context of head-to-head competition -- a firm should not take on two beer brands but could work on a wine and a beer or spirits-- and that global exclusivity should apply with the award of global business. Protective walls can be erected between geographies with overlapping clients. Firms can assure separation of marketing and corporate assignments in a given geography by sending work to distinct offices. I do want to be entirely clear that a firm should not work simultaneously, as an example, for a trade association and a private interest opposing that association’s views; my late colleague, John Scanlon, referring to a competitor with this type of conflict, suggested that the owner had “an ethical bypass.”
On your second point--the possibility of conflict of interest when multiple arms of a “public relations conglomerate” work on clients with different aims. I think there are two tests: first is the work within a holding company by different PR firms; second is the use of specialist services to support a PR company’s work. As you know, nearly all the large PR firms are owned by communications conglomerates; Omnicom has more than 50 individual PR firms. Martin Sorrell, the leader of WPP, refers to a “kiss and punch” mentality between units of his company. I believe that there are more than sufficient safeguards for clients managed by separate units of holding companies because they are truly individual businesses. On the use of subsidiaries in research, digital or other areas, it is absolutely a fair request to insist that there be protections akin to those mentioned in the previous paragraph that govern work for competitors.
On your third point--the matter of a PR firm representing “private and political clients under the same umbrella”-- I agree with your assessment. “The conflict presented by the same company representing a political candidate with a perspective that bears on other corporate clients’ positioning is wrought with potential for conflict,” you said. There is a real benefit to our people in working on campaigns outside of the office, whether political or non-profit. The simple solution might be to provide some time for voluntarism; should a person become very involved, he or she should go on an unpaid leave-of-absence. It is too difficult to navigate conflicts on a case by case basis between political and business interests, especially when the media will always take a quite aggressive view of events.
John, I am very aware that public relations must earn trust every day by operating in a transparent manner and in the public interest. We bear the burden of skepticism borne of hype and spin. I like your suggestion that an organization, such as the Public Relations Society of America, discuss and define these issues. PRSA, which is practitioners’ organization, do provide guidelines around conflict of interests, though they’re fairly broad. Since these issues are at the center of a PR firm’s responsibilities, as with other top consultants from the advertising, legal, accounting and financial fields, we need provide and publish clear principles of ethical behavior. We will update our code of conduct to address the issues you raised.
Thanks for your note; I trust we will have further conversations on this subject.
Posted by Edelman at May 23, 2008 1:09 PM |
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