By Richard Levick
A waggish colleague recently quipped "the 99% of American corporate CEOs who are guilty of something have cast a very unfair light on the 1% who are not."
I recalled this bit of cynicism as I read a research summary in the July 22 PR News that shows a marked drop-off in the number of business media crises in 2004 -- 6,330,
the lowest since 1995. The total is dramatically lower than the numbers for 2003 (9,000-plus business media crises) and 2001 (10,000-plus.)
The fascinating research was compiled by the Institute for Crisis Management (ICM) in Louisville, Ky., which has been doing this survey since 1990 -- well-before the
recent spate of corporate crises and, therefore, all the more interesting for setting a historical context. The research tracks 1,500 media outlets for crises in 16 different
categories, from hostile takeovers to workplace violence. "Crisis" is defined as anything that can trigger negative shareholder reaction.
The natural interpretation is that business managers are doing a better job in both monitoring their internal processes, and communicating with the media and shareholders.
The ICM data tells us is, in part, that 2004 was the year in which the full effects of Sarbanes-Oxley (SARBOX) kicked in. Going forward, it is likewise possible that a
government resolved on extracting maximum compliance will mean even fewer crises when ICM does its research next year.
But all that says nothing about corporate communications as a developing corporate discipline. It only says there's a bigger clamp on bad acts. At the same time, rumors in
Washington, D.C., are rampant that, if he is confirmed by the Senate (as expected), incoming SEC Chairman Chris Cox will unwind some of the more onerous sections of the landmark
legislation.
And while legitimate concerns across the business community have been raised in opposition to at least certain sections of SARBOX, such honest efforts to lighten the compliance
load may well let a few mangy cats back out of the bag and, as a result, cause a new spike in corporate scandals in 2005 and 2006. It is too early to tell what the precise legal
changes could be, but perhaps even more important will be the SEC's use of the bully pulpit to continue to enforce a strict moral compass for corporate executives.
From a communications standpoint, we can at least surmise that management issues- -- including those that land managers in jail -- should still be a primary focus for
communications professionals as they think ahead to their client agendas. According to the ICM report, every industry was affected by business crises, including manufacturers and
retailers, drug companies, banks and insurance companies.
It would be surprising if an entire industry of any sort were not affected by crisis for an entire year.
Yet we can, without much effort, recall crises in each industry that were notable for their severity and duration. There is breadth as well as depth of crisis, and it
underscores the fact that our society is still in crisis mode.
In the PR News article, Larry Smith warned that class actions may be staging a comeback. Yet it almost doesn't matter how medical-malpractice lawyers specifically
retool. The vast percentage of them will be targeting corporations for one reason or another and in one way or another.
As that happens, they will support their causes with characteristically aggressive media outreach that, of course, spells renewed crises on many fronts.
The ICM numbers are descriptive but they are not meant to be predictive. Communications professionals must read this data in the broadest possible context. They must prepare
more creative and aggressive strategies for new and increasingly severe crises. The lull manifest in this research is just that -- a lull. The last thing we can afford to do at
this juncture is relax.