Second of two parts
Global corporations are wising up to the fact that their reputations rest largely in the palms of influential activists' hands - like grenades. And the savvier companies are
taking monumental precautions to make sure their would-be adversaries don't have any pins to pull.
No doubt "greenwashing" - a phrase activist groups coined to describe eco-semantic sugarcoating of corporate messages- is no longer enough to appease socially- and
environmentally conscious investors, customers, partners and employees. Cornered by this once-useful tactic, many companies now incorporate much deeper, ethical standards and
governing principles into their business plans (PRN, March 12). Described in a Newsweek story last week as a "Teflon shield," this strategy involves not only a fundamental
company-wide commitment to socially-responsible behavior, but also the deep engagement of non-governmental organizations (NGOs) as a source of feedback about what the company is
doing wrong - and how to fix it.
The Newsweek article chronicles furniture retailer IKEA's successful deployment of this approach: "This sounds like traditional public relations speak. But IKEA's strategy
goes well beyond that. It involves clashing with one's enemies, building coalitions with the opposition, backroom deals, painful reform - in short, political trench warfare."
Nike wasn't so lucky as to emerge from its reputation wars unscathed, but the lessons the sneaker giant learned from its now legendary child labor debacle laid the groundwork
for the strategy IKEA is now replicating.
"At the outset [of our problems] NGOs were mostly coming to us with criticism. Now there's much better two-way communication. We have more of an ongoing conversation
centering on program development," says Dusty Kidd, Nike's VP of corporate responsibility, alluding to the fact that activists have since been co-opted to advise the company in
the development of ethical standards for its factories and supply chain relationships. "We've learned a lot more about NGOs over the past five years. It's been a painful
process, but it's made us a better company."
Corporate Roles Up for Grabs
Whether the PR profession will be disenfranchised by such holistic approaches to crisis prevention remains to be seen. "The PR departments in most corporations report directly
to the chairman, but don't necessarily get involved in long-term strategy," says Elizabeth Howard, a principal of the Dilenschneider Group in New York who has been evangelizing
the need for corporate ethics and human rights guidelines since 1995. Corporate PR officers have always been charged with communicating company values to stakeholder groups, but
have had little to do with the construction of these values, she says.
One reason for this pigeon-holing is that corporate governance issues historically have been shaped not by pressure to behave ethically, but rather by the consequences
associated with legal noncompliance, says Frank Vogl, vice chairman of the watchdog group Transparency International. PR executives have been conditioned to defer to the general
counsel's office when faced with allegations of human rights or environmental abuses. As a result, "they don't see their role as getting involved in the tremendous pressures that
globalization and new technologies are creating for corporations," Vogl says.
"This has to change," he continues. "PR people in corporations will become increasingly less relevant to the CEO and find themselves reporting to [lower level] corporate
officers."
Nike's Kidd is one industry veteran whose career hasn't plateaued in the face of a changing global business landscape. He joined Nike as director of U.S. PR in 1991 and helped
found the company's first labor practices department in 1996. He now serves as one of two heads of corporate responsibility, overseeing international labor and compliance issues,
community philanthropic programs, employee volunteerism and partnership efforts to help build sustainable economies overseas plus Nike's "stakeholder development" work, which
includes ongoing dialogue and collaboration with activist groups.
Kidd's purview as VP of corporate responsibility is in keeping with the latest outgrowths in corporate reputation management. Other companies (largely in the oil, cosmetics
and apparel industries) have created similar hybrid jobs, attaching titles such as "VP of human rights," "chief ethics officer" and "director of values and vision." But while
solid communications skills are paramount in such jobs, the positions aren't assumed to be PR territory. Rather, they are largely up for grabs.
Consider that Nike's corporate responsibility team includes 75 to 80 staffers worldwide with an array of professional backgrounds. "We've got a former architect, a woman who
used to work in a sweat shop...several women with NGO backgrounds, some guys who previously worked in factory production," Kidd says. "My point is there's no clearly defined path
to get in this kind of work. Dedication is probably the most important defining characteristic."
Awakening the Activist Within
Dedication and true grit may well be what it takes for the most ambitious PR counselors to assume similar roles and convince their corporate boards that multimillion-dollar
operational overhauls are in the company's best interests.
Despite growing academic observance of the "triple bottom line," (which proposes that a corporation's legitimacy is based not only on financial performance but also social and
environmental accountability) sagging current earnings reports are resulting in not-so-free-flowing budgets.
Plus, Howard concedes, ethical proselytizing is a rough road for a communicator. Many CEOs are hesitant to profess a commitment to higher environmental and human-rights
standards for fear they will be subjected to higher levels of public scrutiny. "As of last summer, only five American companies had signed on to Kofi Annan's UN Global Compact,"
she says. Howard identifies this conundrum as an opportunity for PR practitioners rather than a roadblock.
PR execs might also do well to stay apprised of general corruption and human-rights abuses occurring in countries where their companies operate -similar to any situation that
might heighten the corporate vulnerability factor, she says.
"There will always be folks who are not happy with the business development aspects of a global world and who will view [a big brand] as a symbol to which they can attach their
concerns," Kidd says. "We need to take seriously the fact that some issues continue to be attached to us. Whether or not the attachment is fair or unfair is irrelevant."
(Elizabeth Howard, Dilenschneider Group, 212/922-0900; Dusty Kidd, Nike, 503/671-6453; Frank Vogl, Transparency International, 202/331-8183.)