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PR must prove how it adds value for board level influence

24th April 2014


“Just ten years ago – pre Facebook, Twitter, YouTube, and the growth of the blogging community – you’d find just a handful of PR and marketing experts on the boards of FTSE 100 companies. Today, 27 per cent of these firms have PR or marketing professionals on the board – five per cent have more than one.” These statistics are quoted by Sean Williams, deputy managing director at London PR agency Brazil. Figures that demonstrate an increase in PR influence in the boardroom.

Williams believes that this increase is thanks to more brands recognising the power of the consumer: “Social media has enabled brands to understand existing and potential customers better. And savvy boards have realised that there’s more to the future of their business than direct sales and analysis of pushing products and services to market.” 

“Brand perception alongside a true understanding of the target audience has to be part of a successful business. The wider board now acknowledges this, thanks also to good metrics and analysis tools. Without well developed, appropriate communications and product development alongside customer engagement, brands face extinction. The crowd will decide, not the brand.”

More statistics underlining PR’s growing importance in boardrooms comes from the PRCA. Last year’s PRCA In-house Benchmarking Survey reported that 72 per cent of in-house comms leaders believe that the comms team is represented at senior management/board level. PRCA director General Francis Ingham says: “We’ve generally seen gradual progress every year in the level of boardroom representation for communications. I believe that this will keep rising as companies continue to recognise the value of reputation and the financial harm that can be wrought when it is ignored.”

Discussing why PR’s value is being recognised more, Rob Ettridge, partner at PR agency Red Lorry Yellow Lorry, says that organisations are more concerned about what he calls the “Economics of Reputation” – how scandals such as the financial crisis have impacted, and can impact, their brands, reputations and share prices. Ettridge adds: “Businesses are realising that reputation needs to go beyond a nice fluffy corporate vision and be the heart and soul of everything they say and do. Social media is also having a huge impact. Immediate customer feedback means boards are recognising the business value of communications in managing online communities and working with key influencers to ensure the right story is told in the right way at the right time.”

However, PR could get greater board recognition, says Ettridge, by changing the board’s perception of what PR does: “We need to demonstrate the true business value and ROI of what we do, not only to the marketing director or head of comms but to the CEO, CFO and CCO. We have to go beyond simple communications tactics and truly understand our clients’ businesses, their organisational priorities and develop measurable strategies to deliver on those business objectives.”

According to Susanna Simpson, managing director of PR agency Limelight, there are two reasons why PR isn’t prioritised on company boards, which she says are lack of understanding and lack of commerciality. Simpson explains: “Despite the fact that a fundamental element of PR’s role is to educate audiences, its importance and benefits are all too often misunderstood by the boardroom. Many business leaders innocently interpret it as a marketing tactic whilst not necessarily appreciating its power to influence the reputational bigger picture of their organisation, and the longer-term business benefits. PR can deliver advanced understanding of how events will impact a company’s image, and in turn, how this will affect its overall performance.”

“So why don’t enough business leaders rate it? In my view it’s because many PR people lack either the commercial fluency and/or the confidence to perform in a boardroom situation. As an industry we must improve our commercial nous; time to talk more business and less PR.”

Soundbites

Why isn’t PR represented on more British PLCs’ boards?

Alex MacLaverty, group MD, Hotwire UK:

“Part of the problem is the rather reserved nature of the British psyche. We just aren’t natural show-offs so the thought of even doing PR can sometimes feel a bit much, let alone having it represented at board level. The value of PR is also often poorly communicated, which does have a hint of irony. Many campaigns are set up without proper, measurable objectives and are not tied back to clear business goals so of course they’re not going to be considered board-worthy. Last, but by no means least, PR is arguably a sector that tends to be driven by women, and sadly research continues to bear out the shameful fact that fewer women make it onto UK boards than men.”

Lara Molins Caplin, independent PR consultant at LMC PR:

“PR people still don’t understand how to truly embed PR within the organisation. If the industry doesn’t understand and articulate PR’s true potential – how can we convince the board? PR needs to be embedded in all aspects of the organisation from product development, to customer service from legal and regulatory to retail. British PLC keeps handing PR people useless stories to get coverage on and PROs don’t push back. Become the conscience, the soul of your organisation, the vehicle in which your company views itself and then PR’s potential will be truly realised by all.”

Mary Whenman, managing director, corporate, financial and public affairs at PR firm Weber Shandwick:

“I think change is underway, but it is slow. Corporate communications should be present in the boardroom, as stakeholders and the public demand greater transparency and companies see the direct impact of reputation on their bottom line. There is an important role to play in providing strategic advice to board members on complex reputational issues related to day-to-day business operations. However PR’s problem is that anybody thinks they can do it, whether it is part of their job description or not.” 



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