Hidden Powers Revealing the Model Corporate Citizen Complex We’Ve Had the Pleasure of Working With

Home , The Help Album

CONSIDERING A REBRAND? Communication Director VIM Group ensures brands are consistently delivered the magazine for corporate communications and public relations around the world. european issue Number 4/2015 We bring unrivalled and independent experience and www.communication-director.com knowledge. Implementation of your brand properties across all touch points, both digital and on the ground is our business.

The unwritten contract Building tust through corporate governance IMPACT PERFORMANCE TECHNOLOGY VALUATOR™ VALUATOR™ VALUATOR™ Issue European 4 · 2015 o N IRE C TOR D ATION C C OMMUNI Hidden powers Revealing the model corporate citizen Complex We’ve had the pleasure of working with... solutions for complex problems Backing up How corporate social responsibility vision with data drives growth Tracing the evolution of sustainability reporting Delivering your brand promise

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Welcome,

Do you pay your bills on time, clean up after your dog and make sure old papers go straight into the recycling bin? Are you first in line at the polling booth, always ready to lend a helping hand to your neighbour and never slow to volunteer? Then congratulations, you’re (probably) a model citizen. But what if “you” happen to be a corporation? What defines good behaviour when profit margins are your scale of reference? The concept of “corporate personhood” helps answer this. Corporate personhood is the legal notion that a corporation shares some of the legal rights and responsibilities enjoyed by physical humans. Its growth as an idea in recent years raises important questions about what we can and can’t expect from companies in terms of how they behave in society. Make no mistake, this is an important issue: as the must-see documentary The Corporation (2003) points out, 150 years ago, the business corporation was a relatively insignificant institution. But today, it is all-pervasive, replacing the Church, the monarchy and political movements in other times and places as today’s dominant institution. As one of our Issue Focus articles explores in depth, corporations have extraordinary power and influence over our lives: it is up to us as individuals to guard against this imbalance of power and ask corporations to do more than pay lip service to corporate social responsibility and sustainability. Communication leaders from companies as diverse as Vedanta, Ben & Jerry’s and Coca Cola show how their corporate citizenship measures are more than skin-deep: we also look at how corporate governance helps companies earn their license to operate, and how corporate reporting has evolved to become a key communications tool that loudly affirms the corporation’s ability to play a positive part in the local community. After all, isn’t being a good neighbour what citizenship is all about?

Marc-Oliver Voigt Publisher Private Photo

communication director 4/2015 3 78 The evolution of 4/15 corporate reporting The development of new approaches to reporting corporate sustainability 66 Turning values into Issue Focus value

How to align social mission 82 with your products and create Corporate positive change for the world Collaborate and citizenship and empower Corproate social responsibility responsibility goes more than skin deep – it can change public policy 70 The unwritten contract in corporate governance 74 86 Showing trust in employees brings unexpected benefits Setting standards Changing the rules for progress Demanding corporations Integrity, innovation and ethics adhere to responsible conduct can ensure your social license is the responsibilty of citizen to operate stakeholders

6 • agenda setter 20 • Reputation Brands on screen Seeing in the dark

How the digital revolution is changing Reputational risk is around every product placement across all platforms corner. A strategy to indentify, qualify and respond to risk is key

24 • Brand 10 • PR essentials An American icon in The campaigns that China inspired us to care Translating a brand – even one of the A look at some of the world’s landmark world‘s most ubiquitous – requires more charity events than just language skills

4 communication director 4/2015 content

44 • Social Media A propaganda of fear

Recent terror attacks that have 28 • Career shocked the world are fought as much The communications on social media as on the streets labour market

Emerging trends for European communi- 48 • crisis cators and the managers who hire them A guiding light

An ethical perspective guides public 33 • Internal relations through crisis to safety Power to the people

Communicators can drive employee 50 • Content Marketing engagement through a shared sustainability mission The real world of 60 • interview storytelling Gabriele Zedlmayer What will the glorious reign of content Corporate citizenship, sustainability and marketing actually look like? the importance of a diverse board

54 • Investor Relations 90 • communication Reader Will the real IR officer Books please stand up? New and upcoming titles for the Uncovering the different roles of the communicator’s bookshelf investor relations function

92 • ASSOCIATION European Association of

36 •Design Communication Directors The strategy behind The latest developments in disruptive innovation the EACD Applying the rules of design to systems, strategies and experiences 98 • Questions to Always forward, never

40 • theory backward PR goes pop Lina Jakučionienė on the unique communications landscape in the Baltic Representations of public relations in States Wikimedia Commons/Chris Rand; Private; www.thinkstock.com (2) www.thinkstock.com Private; Rand; Commons/Chris Wikimedia popular culture challenge its

Photos professionali standing

communication director 4/2015 5 Agenda Setter Brands on screen

Product placement is advertising that arrives when you least expect it. The digital revolution has made it that much more pervasive

By JAN WISNIEWSKI

ave you ever walked out of the cinema with a burning desire to buy something? Or maybe wondered why your favour- H ite television characters prefer a certain brand of cereal? This could be a result of product placement – the (in)famous marketing technique that has inspired many an internet listicle detailing its most sore-thumb moments. Despite its sometimes unwelcome intrusion into our viewing habits, product placement grew to become an $8.25 billion industry in 2012. Not bad when you consider that many such deals are arranged using a no-money-exchanged barter agreement. And now the digital revolution has brought about a change in the nature of product placement that may see it become more ubiquitous than ever before in its colourful history.

6 communication director 4/2015 Agenda Setter

Big business companies. Says Leo: “Brands were opening up branded entertainment divisions This success led to a change in the in Hollywood to be close to film and tele- practice in the 1980s and 1990s. According vision producers.” to Leo Kivijarv, “brands would hire placement agencies like AIM productions to Product placement around negotiate product placements when prop personnel would reach out for products the world to fit the script.” This created lucrative deals between brands and Hollywood While there has been a boom period blockbuster films eventually led to prod- for product placement in the USA from ucts being written into the scripts of our the 1980s, the technique was not as pro- favourite sitcoms. lific in Europe, partly due to restrictions The rise of reality television saw sav- implemented by governing bodies. Leo vy producers save on production costs by Kivijarv explains: “During this entire lodging products firmly into the narra- period from 1985 to 2010, the western tives of the programmes. Donald Trump European television market was void of raised the price of paid placements by legal paid product placements as a result According to Leo Kivijarv of market- having entire episodes revolve around of the European Commission forbidding ing research group PQ media, branded the product on The Apprentice. This cul- such practices.” However, in recent years media first appeared in creative content minated in the late 2000s with a more the restrictions were lifted and this has more than 200 years ago. As he told Com- professional approach than before from led to a surge in product placement. “The munication Director: “The first known

product placement occurred in Japan in European Product Placement by Channel in 2014 1797 when comic books included referenc- es to a tobacco shop owned by the family of the comic’s artist. It was used periodically during the 19th century, including Charles Dickens drawings in books that referenced a local pub and Guinness beer.” The first promotional placement of a product on the big screen came at one of the earliest points in cinema history when the Lumière brothers created a paid placement for Sunlight Soap called Washing Day In Switzerland. For more than 80 years, informal agreements between companies and Hollywood studios existed, with big stars Asia Pacific Product Placement by Channel in 2014 used to endorse products that were given television and film screen time. However it was not until a film about a certain lost extraterrestrial appeared PQ Media in 1982 that product placement became Global Branded established practice. Hershey’s Reese’s Entertainment Pieces were seen on screen as the favour- Marketing Forecast ite snack of E.T and, as Leo explains, sales 2015-19 rose dramatically: “Those who follow the candy industry estimate a run from the low end of 65 per cent to the high end of 300 per cent, although most estimate

: www.thinkstock.com : Photo about an 85 to 120 per cent rise.”

communication director 4/2015 7 Agenda Setter

2008 Great Recession placed burdens on market economies that had supported the The first film placement film industry, particularly in Italy. As a result, some countries passed laws that Just a few months after exhib- provided incentives and tax cuts if brand iting the world’s first public would support the production costs of film screening the basement films that the country could no longer “The traditional lounge of the Grand Café in supply fund,” says Leo. giants of product Paris in late 1895, the Lumière The Asia-Pacific region has long been brothers showed Washing Day a prolific producer of film and television. placement continue In Switzerland – a short, silent However until recently the use of prod- film depicting women going uct placement was not common practice to create the most about the washing alongside there. Whereas in Europe regulations revenue despite crates displaying the Sunlight acted as a barrier against the spread of Soap logo in the foreground. the marketing technique, the same could the rapid rise of Through a deal with Swiss businessman Francois Henri also be said of South Korea and China be- Lavanchy-Clarke of UK com- cause of long-standing media censorship. the other modern pany Lever Brothers, the idea However, it was cultural expectations in methods.” of product placement in film Asia-Pacific that truly blocked the wide- was born. The Lumière brothers spread implementation of the technique, were rewarded with decreased with cultural mores putting pressure on production costs and Lever producers to avoid promoting products Brothers were provided with in content. As Leo points out: “For ex- promotion on the silver screen. ample, India produces more films than any country in the world, but for decades there were no product placements in those films. In Japan, most placements and films are being distributed outside of traditional commercials, have encour- were barter arrangements in which pri- a country’s border, particularly after the aged advertisers to constantly search for marily transportation firms would pro- success of the co-produced Slumdog Mil- viable alternatives. Product placement vide travel and arrangements in exchange lionaire. Brands within a country increas- offers an alternative with several advan- for a placement the film, such as airlines, ingly used product placements as a way tages over the venerable 30-second com- hotels and automobile manufacturers. to gain market share in another nation, mercial.” Additionally, these brands stated that the such as a Chinese brand in a movie that However beyond the advent of DVRs, brand had to be used in a positive man- gets distributed in South Korea.” multimedia content is now available ner, thus it was not uncommon for the across numerous digital and online plat- automobile model driven by the police to forms, creating widely-diversified audi- Post digital be from the brand providing the bartered ences, ready to be targeted with brand transportation, while the car being driven placements. by thief was a competitor’s model which Advances in technology and the Leo Kivijarv identifies the develop- often be involved in an accident.” shift away from analogue media have ment of product placement in emerging However, such resistance lessened also driven new opportunities for prod- media. This not only saw the rise of musi- due to the rapid rise in internet pene- uct placement in recent years. Professor cians such as Lady Gaga paying for most tration, in which many in th region first Vildan Karisik of the management de- of their Youtube music videos through became exposed to product placements partment at Fatih University in Turkey product placement deals but also the es- by viewing videos online. Revenues have explained to Communication Director tablishment of advergaming. Says Leo: risen steeply in recent years as cultural that technologically-driven changes in “The growth rate for videogame product restrictions lessened, making product product placement began with a spike in placement rises and falls in line with the placements acceptable, primarily due to product placement in television. “Prod- introduction of new console upgrades, a growing middle class with no biases, uct placement on television was rapidly such as the Xbox One and PlayStation4 which led to more product placement adopted,” she says. “The introduction in 2013, and the accompanying titles for practitioners entering a market. Leo of the digital video recorders, which are the new consoles.” This potentially lucra- adds: “More and more television shows blamed for decreasing the effectiveness tive new channel for product placement

8 communication director 4/2015 Agenda Setter

Is it effective? is either implemented by placing in-game advertisements into gameplay – known as billboarding, or by having game char- Product placement has become a acters use branded products to progress profitable and prolific industry, but is it The reality through the game – known as utilisation. really that easy to turn viewers into con- Most recently digital product place- sumers? Measuring product placement Reality television provided ment has come to the fore, a post-produc- efficacy often involves testing brand re- another platform for product tion technique pioneered by US company call and attitudes towards brands after placement. Leo Kivijarv of PQ MirriAd that sees placement added not interacting with media. This has led to Media describes Mark Burnett only to new content but to older media mixed findings that often depend on the as the pioneer in this area. being viewed as reruns or on digital chan- measurement type adopted and the de- Looking to produce his new nels. According to Leo: “Where it becomes sign of the experiment. show Survivor on the lowest possible budget to appease a digital placement is when a company Most recently Professor Karisik test- studio executives, he provided like Mirriad virally puts a product place- ed product placement efficacy on audi- branded products as prizes ment in a television programme or film ences. When it comes to product place- for challenge winners in every when it was not there in the original form, ment on a traditional media platform episode. As Professor Karisik like a Pepsi vending machine that Arnold like television, she found that combining notes, this practise is not often Schwarzenegger passes in Terminator.” these placements with traditional televi- subtle, pointing to the blatancy MirriAd markets itself as “advertising sion advertisements can lead to positive of American Idol, which had 577 for the skip generation” and the popular- attitudes towards these brands. However product placements across its ity of its service means there is a large she warns that the use of post-production 2011 run alone. chance we will see new additions to clas- digital product placement may not lead sic film and television, and differences in to favourable consumer attitudes. “They placement across regions. create high stress and confusion because the watching experience of the audience or consumer is interrupted and he or she tries to articulate what and why there The future is a brand or product appearing all of a sudden,” she explains. Despite the academic uncertainty over whether or not product placement E.T. loves Reese’s Pieces is a reliable way to get people to buy, brands look certain to continue to use it. Hershey introduced Reese’s Looking ahead Leo says that the tra- Pieces onto the market just Blockbusters three months before their ap- ditional giants of product placement con- pearance on film asE .T.’s sweet Some of product placement’s tinue to create the most revenue despite of choice. Mars were originally biggest triumphs have come the rapid rise of the other modern meth- contacted with the suggestion through cooperation with ods. “Digital placement’s growth rate that M&Ms could be featured, Hollywood. Professor Vildan might be rising at a more rapid rate than but a no was the response. Karisik of Fatih University gives television placements, but the television When the producers of the film the example of the surge in industry actually generated more than turned to Hershey, marketing popularity of Ray-Ban Wayfar- twice the organic growth in dollars than executive Jack Dowd agreed to ers as worn by Tom Cruise in digital placements,” he explains. 1983’s Risky Business or of the spend one million for promo- No matter how you look at it, product reported 50 per cent increase tion on the film in exchange for placement continues to grow across all in Omega watch sales after the screen time. The film struck platforms available. So whether or not a chord and Reese’s Pieces Pierce Brosnan donned one as we media consumers like it or not, we were the benefactor, and thus James Bond in 1995’s Golden are more likely than ever to see branded came the dawning of modern Eye. In 2003 BMW provided content inserted into what we are watch- product placement. 32 custom-built Minis for the remake of The Italian Job. By ing or playing. So why not turn on your 2004, the model was out of tablet, fire up the Netflix app, relive the stock in the USA. magic of E.T. and snack down on some Reese’s Pieces. •

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War Child first – when he released his Instant worked with music Karma single in February 1970, in 1995 with the he said records should be like HELP! Album. Recorded in just newspapers, reflecting events 24 hours, the album captured as they are happening: “The the Britpop zeitgeist perfectly, best record you can make, with contributions from Oasis, is recorded on Monday, cut Blur, Radiohead, The Stone Ros- on Tuesday, pressed up on es, Portishead, The Manics and Wednesday, packaged on Massive Attack. Plus contribu- Thursday, distributed on Friday, tions from Paul McCartney and in the shops on Saturday.” As Paul Weller (not to mention ideas go it fitted the brief rath- Johnny Depp and Kate Moss). er nicely.” – Gemma Cropper, It was a response to the plight Public Relations and Artist of the thousands of families Liaison Manager, War Child caught up in the bloody Balkans war that was tearing Bosnia apart. The need for humanitarian aid was urgent so the Help project's response needed to be too. It drew its inspiration from John Lennon

Live Aid

• 1985-2005 • Relief for Ethiopian famine • Organised by Bob Geldof and midge Ure The Help Album by War Child • Prominent musicians included led Zeppelin, Bob Dylan, Madonna, • Original album in 1995 with sting, Paul McCartney follow-ups in 2002, 2003, 2005 • Satellite coverage worldwide and 2009 (BBC, MTV, ABC) • Aid to war-stricken areas • £150m has been raised for famine • Organised by British filmmakers Bill relief as a direct result of the leeson and David Wilson concerts • Featured musicians in 1995 included Brian Eno, Paul McCartney, Paul Billed as the “global jukebox”, the event Weller, Oasis and Radiohead was held simultaneously at Wembley • UK hit album Stadium in London, UK (attended by • The Help Album raised more than 72,000 people) and John F. Kennedy £1.25 million Stadium in Philadelphia, US (attended by about 100,000 people). War Child has produced a series of albums featuring popular musicians ever since 1995 when its first album, The Help Album, raised funds for the charity’s aid efforts in Bosnia and Herzegovina. www.thinkstock.com Photo:

communication director 4/2015 11 pr essentials

Earth Hour

• 2007 onwards • Raising awareness for climate change • Created by WWF and Leo Burnett • over 200 ambassadors including Nelson Mandela, People are an change. From changing indi- miranda Kerr, Sachin Tendulkar, integral part of cli- vidual behaviours to changing lionel Messi, Ban Ki-moon, Kumi mate change, from national legislation, Earth naidoo and Al Gore causing it to suffering from it, Hour shows us the impact • over 170 countries and territo and also as drivers of climate individuals can create when ries involved action themselves. Yet, climate they unite for a cause.” – Sid • $61,487 crowdfunded through conversations often relegate Das, Executive Director, Earth Earth Hour Blue in 2014 and people to the sidelines. This is Hour Global 247,000 signatures collected why we need people-powered in 2015 movements like WWF’s Earth Hour, which make climate Earth Hour began as a lights-off event change, our planet’s biggest in Sydney, Australia in 2007. Since then environmental challenge yet, it has spread to more than 172 countries relatable, understandable and Sun City album by Artists and territories worldwide. It is a crowd- relevant to all. Be it fighting United Against Apartheid based movement that has raised money deforestation in Uganda or and achieved legislation change relating driving efforts to stop Arctic • 1985 to environmental policy. drilling in Russia and save • Protest against apartheid biodiversity hotspots in • Organised by musicians Steven Australia and Colombia, Earth van Zandt and Arthur Baker Hour mobilises individuals, • Featured musicians included Afrika communities, companies and Bambaata, Bob Dylan, Hall & Oates, governments in more than lou Reed, Bruce Springsteen, Bobby 170 countries and territories Womack and U2 to harness the power of the • Produced a top 10 single in Australi crowd and change climate a, Canada and the UK • The album raised over US $1 million

Artists United Against Apartheid was a 1985 protest group founded by Steven Van Zandt and record producer Arthur Baker in protest against apartheid in South Africa. The group produced the track Sun City and an album of the same name. Private (2) Private Photo:

12 communication director 4/2015

pr essentials

Ice Bucket Challenge by the ALS Association

• Peaked in popularity between June and September 2015 • Goal to raise money for Amyotrophic lateral sclerosis (AKA Lou Gehrig’s disease) Created by the ALS Associatione Movember started prompts people to change • The most popular videos came from with a conversation behaviour and take action; • Justin Bieber, Taylor Swift, Bill Gates, between mates this is changing and saving Jimmy Fallon and Robert Downey Jr and so there is a nice synergy lives today.” – Mark Fewell, Over two million videos were to the fact that, today, conver- Head of Market Development, • shared via Facebook from June 1 to sation and mates are central Movember August 17 with over two million to everything Movember does; more on YouTube by the end it’s just a bigger conversation. of August That one conversation back over $220 million has been raised in 2003 has grown into • billions, taking place each The challenge involved dumping a bucket of Movember around the world. ice water on the head of yourself or someone The moustache effectively Movember else and then nominating someone else to turns men into walking talking participate and donate to the ALS Association. 2003 onwards billboards for men’s health. As • It went viral across the USA and then a result of last year’s cam- • Assists men’s health projects the world in mid-2014. paign, an estimated 1.7 billion • founded by Travis Garone and conversations, both online and luke Slattery face-to-face, were had by the • Past ambassadors include Movember community. All too stephen Fry, Mick Fanning, Theo often it’s the funds raised by a Walcott, Snoop Dog, Bear Grylls, charity that are remembered Andrew Symonds among others but equally important is the • Annual campaigns held across awareness generated. It is the world awareness that educates and • Has raised over AUD$ 650 million since 2003 with more worldwide

Since 2004, the Movember Foundation has organised events to raise awareness and funds for men’s health issues, such as prostate cancer and depression, in Australia and New Zealand. It has since spread to countries such as Ireland, Germany, South Africa, Israel, Czech Republic, El Salvador and the USA Private; Wikimedia Commons/Chris Rand Commons/Chris Wikimedia Private; Photo:

14 communication director 4/2015 People are talking about you

Inﬂ uencers and word of mouth are powerful tools in forming brand reputations. But while you and your company endeavour to project one image, the perception created might be something entirely different. You have to continuously monitor industry and stakeholder conversations to assess brand perception and keep track of what the press and internet say about your company. How?

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ad Communications Directors Magazine_def.indd 1 11-11-15 14:46 pr essentials

Product Red by One

• 2006 onwards • Raising awareness and funds for the elimination of HIV/AIDS in Africa • Founded by Bono and Bobby Shriver • Participating brands include Nike, GAP and Apple So far it has generated over $150 One of the key that affects so many people.” – • million for HIV/AIDS programs in things that made Anthony Newman, Director of Africa #nomakeupselfie Brand, Marketing and Commu- so popular was its simplicity. It nications, Cancer Research UK A licensed brand that seeks to engage the was clear what you had to do, private sector in raising awareness and it didn’t require much effort funds to help eliminate HIV/AIDS in Africa. A and anyone could do it. It was portion of the contributions received from the also good fun. Which is why partner brands is assigned as profit as Product we decided to get involved Red is an amalgamation of humanitarian aid and tweet our own #nomake- and for-profit businesses. upselfie alongside our text to donate code, offering an equally simple and easy way for people to make a donation. The nomination element also #nomakeupselfie by Cancer ensured that it spread. Once Research UK you were nominated you couldn’t really say no, it was • Peaked in popularity between 18 too compelling; especially march and 26 March 2014 once people started doing • Aaised money for Cancer Research it to raise money for Cancer • An organic internet trend that was Research UK. We noticed at adopted by the Cancer Research UK that point that a lot of people • Celebrity participants included were posting their selfie along Beyoncé, Carrie Underwood, Sofie with a screengrab of their vergara, Kylie Jenner and Tyra Banks donation, people were proud • Attracted wide coverage in UK to be part of something pos- news and celebrity websites itive and exciting. Finally, the • £8 million was raised in six days speed at which it grew meant that it became impossible to The no-make-up selfie began when women avoid. Everyone was talking posted pictures of themselves without make- up on Twitter and Facebook and urged their about it. And underneath all friends to do the same. The theme soon be- of this, cancer is something came cancer awareness, with women posting selfies of pledged donations. icholson; www.thinkstock.com; Private www.thinkstock.com; John N icholson; Photo:

16 communication director 4/2015 It’s a challenging time for your business Social attitudes are shifting: Employees expect more information. Regulators’ priorities are changing and investors are demanding transparency. Digital is transforming how Your job has your stakeholders engage with you. got more complicated It’s never been so important to deliver a coherent corporate message. But delivering integrated, responsive corporate communications requires an integrated, responsive agency. We can help Our unique set of skills and capabilities – experience and insight, creative excellence and world-class delivery – are all designed to help you build and protect your reputation in a rapidly changing world.

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For more information on our services T +44 (0)20 7815 2035 or how we can help, please contact: E [email protected] addison-group.net Suzanne Fowler W Business Development Director @addisonlondon pr essentials

Red Nose Day by Comic Relief

Band Aid • 1988 onwards • Originally aimed at aid Ethiopian • 1984 with incarnations in 2004 famine but now includes aid to and 2014 wider groups of disadvantaged • Anti-poverty efforts in Ethiopia people (later Darfur and the Ebola crisis) • Organised by Lenny Henry • organised by Bob Geldof, Paula • A number of British celebrities have yates, Midge Ure appeared in the annual telethon • Various UK and Irish Pop stars • BBC live broadcast bi-annually on participated in the original record RND such as U2, Boomtown Rats, • £1,047,083,706 has been raised so Bananarama, Spandau Ballet, far (combined with various Comic Wham! and Duran Duran Relief initiatives) • Received worldwide coverage with Do They Know It’s Christmas going The biennial telethon held in March alter- to the top of the UK charts and nates with sister project Sport Relief and aims charting around Europe and in to bring about positive and lasting change in the lives of poor and disadvantaged people. Australia and New Zealand Similar events are now held in other countries Over US$24,000,000 was raised • including the US, Australia, Germany and

Russia. Band Aid was a charity supergroup featuring mainly British and Irish musicians. It was founded to raise money for anti-poverty efforts in Ethiopia by releasing the song Do They Know It’s Christmas? for the Christmas market that year. Singles were recorded in

2004 and 2014 by new artists Øverås H elge Commons/ Wikimedia www.thinkstock.com; O n1x; Commons/Rept Wikimedia Photo:

18 communication director 4/2015 Lack of Employee Engagement is Killing Your Bottom Line

How companies and executives are embracing technology to drive engagement

From inboxes to outdated intranets, technology has inundated business leaders with more information than ever before. The key to success? Engaging in company conversations without getting overwhelmed. Find out how embracing technology can lead the way to employee engagement and higher productivity.

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250349_jive-n_Comm_Director_Ad.indd 1 11/9/15 9:34 AM Reputation

Seeing in the dark

Headline-grabbing scandals can cause massive damage: a deposed CEO, a replaced communications head or billions of euros lost. But how to anticipate reputational risks – or even avoid them – before a crisis hits?

By Phil Riggins

20 communication director 4/2015 Reputation

and regard it as an asset. They are “continually” doing more to strengthen trust, tighten risk management procedures and demonstrate transparency. If, with all of these ideals and safeguards in place, cata- strophic reputation crises can still break, what is the lesson for senior in-house communicators? The task is hopeless... so just give up? Clearly, that is not an option. Society will only expect business to try harder. So what tools and techniques are communications professionals using to proactively manage reputation and horizon scan for emerging risks? Most large corporations have a risk “H ow could they have been so stupid?” If However, for the majority of these same committee or audit and compliance com- we’re honest with ourselves, we often communicators (55 per cent), identifying mittee that is responsible for identifying think this when we hear about a crisis hit- emerging issues remains a significant and addressing risks of all types, includ- ting an organisation. The next question is: challenge for their organisation and four ing risks to reputation. But until recently, “Who knew and for how long? Was it a in 10 (42 per cent) are concerned that their reputation was behind other types of risks team of renegade employees or did it go organisation is not prepared for a crisis.1 considered. That must and will change. all the way to the top?” A big crisis can A typical annual report of a large Brunswick Insight’s research found that topple the CEO, finish the career of the multinational company suggests it is most (84 per cent) senior in-house com- head of corporate communications and doing and saying all it needs to when municators say corporate reputation is ratchet up damages in the billions. As for it comes to risk management. Compa- of increasing importance to senior leader- the long term reputational damage, that nies routinely identify risk management ship. Other evidence from Deloitte surveys is a moving figure. as very important and give detailed de- of senior executives around the world in From the outside looking in, it is easy scriptions of their best practice for risk 2013 and 2014 shows that reputation dam- to be judgemental. In today’s business identification and management. They age was considered the number one risk world, the response to a crisis is that sen- promote the value of their reputation concern, and nine in 10 (88 per cent) were ior leadership should have seen it coming. explicitly focused on reputation risk as a But there’s one question that rarely gets key business challenge.2 asked and it is critical for corporate communicators to consider: could they have “Is it within Defining seen it coming? Is it within the power of organisations to look around corners the power of reputation risk and see in the dark, to spot and remove reputation risks before they cause mas- organisations to The first step in effective reputation sive destruction of shareholder value and look around corners risk management is to clearly define what damage to society? Perhaps we shouldn’t we mean by “reputation risk”. General expect this type of future vision; these and see in the business risk tends to fall into one of days we do. three categories: operational risks that Increasingly, Europe’s communica- dark, to spot and go with the day-to-day running of the tions professionals are being asked to remove reputation business (including product quality/safe- help their organisations identify repu- ty, supply chain, finance, and compliance) tational risks before they strike. A recent risks before they and which are supposed to be under the Brunswick Insight/EACD survey of sen- cause massive company’s control; strategic risks that a ior in-house communicators across Eu- company assumes in order to try and rope found that nearly nine in 10 (87 per destruction?” beat the competition; and external risks cent) expected identifying and addressing that are due to events beyond the control reputation risks before they harm the of the organisation. Reputational risk can business to be a major focus of their work. fall into any of these three categories.

communication director 4/2015 21 Reputation

One useful way to define reputation risk is as the risk of loss resulting from er guidance, stronger culture and ready damages to a firm’s reputation. The loss punishment for transgression, managing could be lost revenue, increased operat- this type of risk is difficult for large, geo- ing, capital or regulatory costs, or destruc- graphically diverse organisations. tion of shareholder value.3 Reputational risks tend to occur when: 1) there is a gap What are companies doing between a company’s reputation and the Executive Summary reality of the firm, 2) there are changes to identify and manage • Companies are increasingly in social beliefs or expectations, or 3) the reputation risk? recognising the importance company exhibits poor control over its of reputation risk. operational risks.4 Gaps between percep- Even with the best policies, practices tion and reality occur when a company’s and systems in the world, it is impossi- • They are putting in place reputation with its stakeholders is very structures, such as dedicat- ble to eradicate all reputation risk and positive but the actual character or be- ed committees and leaders, crises. That’s why crisis response prepa- haviour of the company doesn’t live up and comprehensive systems ration will remain an important part of to those perceptions. These gaps create to map, track and manage the reputation risk management toolkit. very real risks to reputation. Should this reputational risk. Nevertheless, companies are making underperformance and failure to live up structural/cultural and system changes, to expectations become known, reputa- • Crises will still occur, to identify and manage reputation risk. tional damage is the result. However, it is therefore, communications These include: possible that the perception gap works in professionals need to help their organisations prepare the other direction – when reputation is 1 worse than actual character or behaviour to deal with them quickly, deserve (e.g. the company may be meeting transparently and effectively. or exceeding expectations but stakehold- Dedicated reputation risk com- ers are not aware of it). Reputation gap mittees: While many large banks and risks in either direction can cause real other financial institutions have separate value destruction for a company – and reputation risk committees with clearly can and should be managed, either by articulated risk frameworks and who re- changing behaviour, more effective com- port directly to the board and CEO (a re- munications, or both. action to the financial crisis and resulting Also, societal beliefs and stakeholder in developing markets) while other parts reputation damage), most companies still expectations shift over time. Practices of the company continue the practices, tuck reputation risk into their general that were once acceptable may suddenly either because they were not aware of the audit and risk committee or someplace be reputational risks as social norms and change or because they chose to ignore similar. Best practice requires giving rep- behaviours change. Whether the issue is them. Individual employees can also go utation risk the attention it deserves – the use of palm oil in consumer prod- rogue and act in ways that are incon- including a voice in assessing the firm’s ucts, the number of women on boards, sistent with a company’s stated values appetite for strategic risks. Companies or aggressive tax minimisation arrange- (e.g. saying something inappropriate on such as Barclays Bank are putting the ments, stakeholders may condemn what Twitter) or illegal (e.g. conspiring to ma- assessment of reputation risk at the heart was once considered acceptable. The best nipulate Libor rates). Either way, the re- of their risk management approaches, way to stay ahead of this type of risk is to sult can be severe reputation damage for particularly when considering new strat- closely monitor stakeholder expectations the company. The phenomenon of data egies. Reto Kohler, head of strategy at and factor them into company behaviour, permanence only compounds this risk. Barclays Investment Bank says: engagement and communications. Because nearly every email, text message Finally, poor organisational control or social media post we create basically Now our risk framework quite ex- and coordination can lead to situations lives forever once we hit send, companies plicitly demands evidence that when where one part of the business is working are at perpetual reputational risk from we’re thinking about a new strategy or to address stakeholder expectations (e.g. employees’ electronic communication. whatever it may be, that conduct and agreeing to stop certain marketing prac- While reputation risk due to poor organi- reputation risk be taken into account. tices related to the sale of infant formula sational control is preventable with clear- [Deloitte 2014: Reputation Risk Survey]

22 communication director 4/2015 Reputation

Programmes and campaigns to mitigate operational reputation 2 risks. More and more companies are realising that putting up posters spelling Creation of a chief risk officer out their mission, vision and values is not Conclusion with responsibility for reputation enough to inoculate themselves against risk who reports directly to the board or charges that they could have done more It takes time to repair reputation CEO. While the CEO has ultimate respon- to avoid a crisis. The current emphasis is damage and restore lost trust. Unethical sibility for the reputation of the company, on employee engagement campaigns that or illegal behaviour is never acceptable day-to-day oversight of reputation man- help educate and internalise the desired – but is often unpredictable. It is impossi- agement by the CEO is not realistic. Hav- behaviour among staff. Should a crisis oc- ble for any company to know everything ing a CRO with CEO support is a powerful cur, these more interactive programmes everywhere. And while it is great to have and necessary alternative. help to demonstrate that the firm proac- whistle blower systems to enable report- tively did all that it could to anticipate ing of bad behaviour, no system is perfect. 3 and address this type of risk. What’s needed in this age of transparency and always-on social media conversation Mapping and tracking of all (where little stays secret for long) is a sources of reputational risk. Wheth- composite strategy for managing repu- er done internally, externally or in col- tation risk. laboration with expert advisors, com- Each element of the strategy must panies are putting in place systems and work together to ensure that the com- approaches for mapping and tracking pany is best placed to identify, qualify reputational risks wherever they may and respond to risks before they become arise, including early warning of social crises. Critical to an effective strategy is media reputation risks. Real-time risk in- acceptance of and preparation for the cri- Phil Riggins telligence and early warning systems can sis that could come at any moment – best Partner, Brunswick Group generate mountains of data. Separating practice here includes putting in place

what matters from the noise isn’t easy Phil Riggins leads Brunswick’s crisis communications procedures, and and can’t be reliably automated. Mak- Insight practice in EMEA. His running regular simulation exercises and ing sense of this data and getting it into work focuses on helping clients drills to stay sharp and up-to-date for all the organisation in a timely way requires communicate and engage with eventualities. both skilled human analysis as well as their audiences and stakehold- Senior in-house communicators can easy-to-understand dashboards and others to build strong reputations and should help their organisations im- er data visualisation tools. and brands. Over the years, he plement a comprehensive reputation risk has consulted on reputation, management strategy. Their position in 4 brand, issue management, the organisation gives them a unique message development and vantage point for identifying and man- Surveys of stakeholders/consum- thought leadership for multi- aging reputation risks, as well as for pre- ers to understand their concerns and ex- national corporations, national paring answers and navigating the crisis governments, political figures, pectations, as well as to identify issues if the lights do go out. intergovernmental organisa- • on their radar. As reputational risks are tions, non-profits and industry by definition derived from stakeholders associations. Prior to joining concerns and expectations, it is only log- 1 Brunswick Insight/EACD, “Future of Corpo Brunswick in 2011, Phil created ical that companies should periodically rate Communications: Cutting Through the and led insight and opinion Noise, Survey of Senior European Communi or continuously listen to these business research practices in Europe, cators” (June 2015) critical audiences. The result of this work the Middle East and Africa for 2 DeLoitte Surveys on Reputation Risk, 2013 and 2014 is often a detailed engagement strategy to Weber Shandwick and APCO. 3 Wikipedia increase alignment between how stake- 4 Harvard Business Review, “Reputation holders perceive the company and how and Its Risks”, Robert G. Eccles, Scott C. Newquist, Roland Schatz (February 2007) Photo: Private Photo: the company wants to be perceived.

communication director 4/2015 23 Brand

AN AMERICAN ICON IN CHINA

By Jessica Lee

Translating a brand – even one of the world‘s most ubiquitous – requires more than just Such impudent curiosity towards language skills. western symbols is not unusual in China. For the record, Ronald is simply a clown, he is not a mascot. Even after 25 years of our first restaurant in China, the need to explain to Chinese consumers everything from our Big Mac to our business model is more pertinent than ever as the company opens more restaurants. China is the third largest market in McDonald’s S in restaurant units, but even at 2,200 res- leveled China’s playing field and an ur- hanghai. 26 degrees and an unusually blue taurants we are only 15 per cent of the banised, tech-savvy post-90s generation sky in September: Ronald McDonald was US market. has its own view of cool. performing on stage with friends Grimace, In 1990, when McDonald’s opened in In customer focus groups and sur- Birdie and Hamburglar at McDonald’s Shenzhen, it was enough to be western veys, there is no ambiguity in responses annual McHappy Day Run. A Chinese and present. We made western culture that McDonald’s sells hamburgers and boy of six demanded, “Who is he? Why accessible through the novelty of burg- fries and that it is a place where parents can’t I see his face?!” We explained that ers, fries, milk shakes and self-service. buy Happy Meals, ice cream cones and Ronald is our chief happiness officer and Today, seven out of 10 Chinese recognise nuggets for their children. However be- he is a clown. “That’s impossible! What is the golden arches. That’s nearly a billion yond that, you’d be hard pressed to find a clown?” Our young friend was confused people or three times the size of the US these respondents name the Big Mac or but determined to see Ronald’s face. population. However, competition has the Apple Pie.

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Five ways to cut four billion. 70 per cent of Chinese social through cross-culture media users are under the age of 35 and communications they spend more than 90 minutes per day on social networks. More than 60 per cent of rural digital consumers are on Despite decades of globalisation, I still e-commerce, just as active as urbanites in witness callous assumptions and general- China. At first glance, social media may isations of local operating environments. appear complex in China but there's no Truth be told, it is not just a cultural need to be fazed. issue, it is philosophical and political. As The average Chinese female netizen China accelerates its reforms and applies uses a variety of social media platforms: its rule of law, foreign companies must be typically, she has a microblog and three ultra-sensitive to the way they position to four messaging apps and has multi With this phenomenal digital traffic, everything. apps from shopping to video streaming. it is no surprise that we are allocating From a communications perspective, In her world, the bricks and mortar of more than two-thirds of our communi- when we translate anything from English shops are irrelevant. Whether it is Zara cations budget to social content strate- not only do we lose language but we also or adidas, she is browsing virtual shop gies covering anything from listening to lose true intent and corporate culture. fronts on Tmall.com, one of China’s most analytics; from asset creation to brand The reverse can be worse. popular businesses to consumer e-com- publishing. Apart from language and concepts, merce websites. Given consumers’ online frequen- China’s media environment itself is po- cy and volume, the pay-off from social litically and operationally challenging. media strategies is rewarding in China. China has some 17,000 print, radio and Increasingly, marketers are shifting away television media outlets hardwired by “When we from expensive cable television networks firewalls and censorships. On top of that, because social media platforms are allow- it is very fragmented with a lot of ineffi- translate anything ing us to cut through traditional bound- ciencies in advertising buys which makes aries. More importantly technology has promotion campaigns in China complex from English not enabled brand storytelling. The result and expensive. only do we lose is a rich media platform with powerful This is a key reason that drives com- content that reduces cross-cultural mis- panies to turn to word-of-mouth mar- language but we also interpretation and ultimately creates in- keting in this country. After all, for every timacy and trust for the brand . Facebook, YouTube, Instagram or Twit- lose true intent In 2012, an official Weibo (China’s top ter that is blocked, the same-but-differ- and corporate microblog) response to an undercover ent versions are available in China. With television report on China’s Consumer thousands of media and social platforms, culture.” Rights Day was shared by 8,400 different content is the emperor; and the mastery key accounts and reached over 10 million of this phenomenal landscape with its people on Weibo in two hours. In 2015, connectors, pundits and influencers is an International Pi(e) Day activation on critical. While each industry will have its It is no wonder that despite China’s March 14 garnered us 250,000 new fol- own unique communication strategy, I recent economic softness, retail sales still lowers on our official Wechat account suggest they could incorporate the fol- grew 10.4 per cent in August 2015; and (China’s largest messaging app) over a lowing five areas: e-commerce grew at twice that rate. You single weekend. The following year, we could say that Chinese consumers are re-launched the Big Mac in China using living online. In 2012, McDonald’s Chi- 1. Use social media to social media to familiarise netizens with na took its delivery service online and the history of the Big Mac and teach them unlock brand in 2013, we launched a mobile delivery the Big Mac chant. The three-week social culture app. Our online traffic is growing at dou- media focus connected Chinese to Big ble-digit percentage points and to grow Mac fans in other parts of the world do- Social media is exploding in China. beyond our current delivery capacity, we ing the chant. Never mind three times the The number of users across China’s top now have to expand to third-party food number of Big Macs sold - we unlocked 10 social media platforms is a staggering delivery platforms. brand culture.

communication director 4/2015 25 Brand

grates locally and stays relevant to what 2. Made in China Chinese consumers expect. Visiting exec- for China utives may be surprised that our menu board does not feature the classic beef Even when Chinese consumers fol- varieties. Indeed, McDonald’s top-selling low the same online decision-making item in China is the McSpicy Chicken pattern as our peers elsewhere, there are Burger and the Premium Grilled Chicken basic differences which limit global con- Sandwich. We sell six times more chicken tent asset-sharing and deployment. In Chinese social than beef; and our top selling pie is taro, media giants fact, we may sometimes feel exiled from not apple. Quite the reverse for the brand global content. Therefore re-creation is in Europe or US. • First released in January needed. 2011, WeChat is a mobile In a recent global social media cam- text and voice messaging 3. Attitude – how would paign, McDonald’s created a set of digital communication service Confucius position this? assets for Facebook, YouTube, Twitter developed by Tencent Hold- and Instagram. Every market would ings Ltd. It is the largest draw from this social media bank. Every standalone messaging app With 2,200 restaurants in China, Mc- market, except China. Translations aside, by monthly active users. As Donald’s definitely has its fair share of while others leverage a global YouTube of August 2015, WeChat has issues and crises in this market. No mat- channel, we had to recreate an entire 500 million active users, ter how strong our messaging can be in sub-site for China’s separate networks. with 70 million outside of English to protect the brand, successful The ability to be part of a wider global China. crisis management in China can always campaign was triple the workload for us. be drilled down to attitude. It feels like Many foreign brands already have • QQ is an instant messaging an obvious truth but it requires stating. software service developed presence on Chinese social media net- Sometimes I quip with my team, “how by Tencent Holdings works but they usually find it difficult to would Confucius position this?” Limited. QQ also offers a va- deploy globally-created brand assets in Communication practitioners in riety of services, including very meaningful ways. Communication China would struggle to agree with their online social games, music, practitioners in China need to overcome shopping, microblogging, global colleagues on the phrases or words language, censorship and most of all, we movies and group and voice used during issues or crisis management. have to overcome content relevance. chat. In China, messaging during a crisis must Online, McDonald’s content in Chi- first reflect depth of sincerity and inten- na, while staying true to brand values, • Weibo is a microblogging tion. The Chinese have laser-sharp senses is made in China for China. Generally website. Akin to a hybrid when it comes to attitudinal truths and speaking, this content is divided into of Twitter and Facebook, it authenticity. It is a result of their heritage what we want to push and there is con- is one of the most popular and inherent in the Chinese language. tent that responds to social hot topics sites in China. It was and trends in China. Over the past three launched by SINA Corpo- years, through social listening and anal- ration in August 2009 and ysis, we have collected a large database currently has 503 million registered users. About of McDonald’s enthusiasts comprising “Our 100 million messages are top Chinese bloggers, key influencers and posted each day on Weibo communication digital artists who are actively generat- and over 400,000 compa- ing content. In September, we discovered nies hold official business strategies can an artist who proactively created nine accounts on the website. digital postcards complete with son- only be as strong nets showing Chinese traditional char- as our business acters enjoying McDonald’s. When we approached him, he gave us full usage strategies.” rights to his drawings at no charge. Our communication strategies can only be as strong as our business strategies. In this aspect, the business inte-

26 communication director 4/2015 Brand

I have unfortunately witnessed inex- Communications play the role as an cusable attitudes of foreign companies accessory to business and profits, but in that have dug themselves deeper into China it has an even bigger role in con- crisis and I have seen companies recover “The Chinese necting Chinese consumers to a foreign brand trust using a relationship-focused brand’s heritage. Without the knowledge logical approach to crisis management. have laser- of what our brand stands for, trust be- In a training session on how we should comes difficult to build. If retailers forget prepare for a dawn raid in China, one of sharp senses this in the course of rapid growth and the key principles shared was “attitude” when it comes to development in China, the business could and an offer of tea to the inspector as an easily be a house of cards when a crisis important act of attitude and humility. attitudinal truths hits. This is counterintuitive but the effort is and authenticity. important. 5. Reinvent The second part of attitude is respect. It is a result of The Chinese can smell a mile away when your team they are being patronised. Language, their heritage and tone, graphics, product names… be very inherent in the A month ago, I was given a template sensitive to Chinese sensitivities. which asked me to define the percent- On the 2013 World Consumer Rights Chinese age of time spent on different things in Day, China’s official broadcaster, CCTV, the communications function. It was attacked Apple’s customer policies and language.” hardwired to specific tasks like media practices. The broadcaster said it treated relations, event management, internal Chinese as second-class citizens. For Mc- communications and corporate social Donald’s, we are often asked if our Big repsonsibility. I found it a challenge to Mac is smaller in China. For the record, it complete because, you see, that’s not is not. However, there is always suspicion entirely how our communication team that versions of what is served in China works these days. are inferior to what’s sold overseas. Over the past 12 months, I have actually reinvented my team structure twice. 4. Help consumers Today, our team members work more Jessica Lee like channel managers and content cre- appreciate the brand Chief Communications and ators. They take a piece of news or an Corporate Affairs Officer event and think about how they want Outside of Shanghai’s city centre, a McDonald’s China to tell a story and share it. They can use McDonald’s crew is handing out leaflets owned, earned or paid media, or even use with instructions on how to use the Drive- In July 2013, Jessica Lee moved an event. There is no siloed vertical struc- Thru. In China it is necessary to show and to Shanghai from McDonald’s tures to their job scopes; rather, the way tell the concept of a Drive Thru not only Asia Pacific region to lead the they work reflects the nature of China’s to customers but also to landlords and communications and corporate fluid social media environment. affairs function for its China di- government officers granting operating That said, this will require change vision. Prior to joining McDon- licenses. While it is ubiquitous in the US, and maybe a different kind of talent, the ald’s, Jessica worked as director with a 70 per cent Drive-Thru ratio, only kind of talent which can also produce and of branding and communica- one in 10 restaurants in China have them. direct content, not just write press releas- tions at the Asia-Pacific office As connected as Chinese consumers of insurance company Aviva es. Such caliber and quality of talent can are in a sea of websites and mobile apps, (from 2004 to 2007), as senior be few and far between in China but I an understanding of the history behind manager corporate affairs for encourage companies to take bets on the western brands may not exist. As much Standard Chartered Bank (2001 post 90s generation in modern China. • heritage as McDonald’s may have with to 2004), and as director of stories of Ray Kroc and more, that was corporate communications at not the natural starting point in our com- ESPN Star Sports (1998 to 2001). munication initiatives. In my opinion, it’s a big miss. Photo: Private Photo:

communication director 4/2015 27 Career

Understanding the European communications labour market

Emerging trends for European communicators and the managers who hire them

Interview with Willem De Ruijter

lem De Ruijter), have recently completed research into the European communications candidates’ market, producing guidance for hiring managers and human resources in the field. The study examined the responses of more than V 250 European corporate and marketing VMA Group has a 37-year history in plac- communications professionals. ing both communications and marketing The results were presented at this professionals into career-enhancing posi- year’s European Communication Sum- tions and strengthening communications mit in Brussels. We took the opportunity functions, for every type of organisation, to discuss with Willem the key findings all across the globe. The group’s studies from the Understanding the European and analysis have become resources for Communications Labour Market report, benchmarking, as well as in recruitment the emerging trends and issues and his planning and decision making. Now, for thoughts on what this means for both the second time, VMA Group’s European professional communicators and hiring practice (led by executive director, Wil- managers in Europe.

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At this year’s European Commu- nication Summit VMA Group conducted a mini labour market Are communications profession- This openness is never more apparent survey amongst attending als willing to change roles? than in our day-to-day work and in the participants. In general the Absolutely. 95 per cent of the pro- conversations we have with our candi- conclusions of the larger fessional communicators we surveyed dates and wider community of commu- pan-European survey were stated they were open to new job oppor- nicators; our approaches are always met confirmed with one notable tunities. Even though this is a quite high with interest and where a role might not exception: participants were a percentage indeed, it did not come as a be quite right for them, they are happy little less open to changing jobs. surprise to VMA Group. From our Euro- to make recommendations and introduc- Only nine per cent reported they pean offices in Amsterdam, Brussel, Paris tions. were actively looking for a new and Frankfurt we are in close contact job (compared to the 43 per cent with many communication professionals above); however 59 per cent per and the study confirms what surfaces in cent reported that they would consider new opportunities if our conversations with them. they were presented to them. Looking at the results more closely, Still, 68 per cent of participants almost half (43 per cent) of respondents are open to new challenges are actively looking for a change in role or compared to 95 per cent for step up the career ladder, while a further the total market, a significant 52 per cent were shown to be ‘passive difference. candidates’ – those who would be open to switching roles if the right opportunity presented itself, those who have to be actively approached to get them involved in recruitment processes. Are you currently: This highlights a continued phenomenon (we saw similar numbers in our 2013 Understanding the European Communi- Looking for a new job 43% cations Labour Market report) whereby Considering opportunities 52% ambitious, skilled communication pro- Not open to opportunities 5% fessionals – thanks also to an increasingly candidate-driven market – are almost always open to new opportunities and to making a move.

communication director 4/2015 29 Career

3% Development 20% Opportunities 77% 0% Company 12% Culture 88% What factors do you consider to be Company’s 3% Financial 44% important when Performance 53% changing jobs? 2% Terms and 48% Conditions 50% 2% Salary 42% 56% Not at all 0% Management 24% Partially 76% A lot What are the key factors communicators consider when moving jobs? For our respondents, company culture, development opportunities and management remain the consideration What do communicators view as factors deemed most important when their ideal next career step? changing jobs. Along with a clear preference to Professional communicators are work for an international company keen to work in companies where they (for 87 per cent of our respondents), feel there is a natural ‘fit’; where their the majority of those surveyed (70 per values are reflected, their skills recog- cent) stated their ideal next career step nised and their approach respected. An would take them to another organisation; understanding of a company’s culture is with 23 per cent seeking a similar role isation. These statistics reflect our daily therefore vital for candidates when con- in a new organisation, but a consider- conversations with communication pro- sidering a new role – helping to bring ably greater percentage (almost double, fessionals; the most ambitious and driven a job description to life, adding colour at 47 per cent) seeking to take a step up, of whom are keen to hone and test their and context, is where a good recruitment into a more senior role, in a new organ- skills in new environments. consultant or agency adds real value for both client and candidate. Acutely aware that communications is a continually-evolving, increasingly complex, 24/7 industry, professional communicators take the upkeep of their A more senior role in your 15% skillset very seriously; always seeking op- current organisation portunities for personal and profession- A more senior role in another organisation 47% al development, keen to enhance their A similar role in another experience and expand their repertoire. organisation 23% Unsurprisingly, development opportuni- A more ‘specialist’ 10% ties are then front of mind for them when communications role moving jobs. An interim position 3% ‘Find a boss, not a job’ seems a sen- A move out of corporate timent shared increasingly by our can- 2% communications didates and those who responded to our survey – how they are to be managed and by whom are now key considerations What do you see when accepting an offer and changing as your ideal next roles. career step?

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Which discipline would communi- Are communicators willing to re- told us that international organisations cators most like to work in? locate to a new country? were their preference), it is the role of With the lines between communi- More than two thirds of our respond- recruitment consultancies, such as our- cation disciplines increasingly blurred – ents (72 per cent) said they would be will- selves, to identify those candidates who digital media continues, simultaneously, ing to relocate to a new country. This is would deem this type of opportunity and somewhat paradoxically, to disrupt critical for hiring managers who, in our ideal. Whilst there are trends, peoples’ the status quo whilst levelling the playing experience, often only explore recruit- situations and motivations vary wildly – field – there is more of a move towards ment solutions at a national level. one man’s ceiling is another man’s floor, specialist communicators, generalising. This openness to relocate in conjunc- after all. There definitely is a group of This is reflected by our respondents, 78 tion with continued globalisation, the in- candidates who for various reasons can per cent of whom would consider a move creased need to communicate across ge- be interested in a more general communi- to a different communications discipline. ographical boundaries and to understand cations role in a smaller company as well. Whilst we saw some gender disparity cultural nuances, means hiring managers Are interim roles attractive to pro- (considerably more women, 43 per cent, should make sure they take advantage of fessional communicators? than men, 28 per cent, favoured a move global networks when recruiting commu- Increasingly, yes. Our report revealed into internal communications), external nications roles if they are to access the that more than half (52 per cent) of com- communications was the most popular widest talent pool. munications professionals surveyed discipline overall (60 per cent), followed Do communicators want manage- would consider a career in interim man- by public relations (52 per cent) and then ment responsibility? agement, with 37 per cent of those willing public affairs (42 per cent). This is not un- An overwhelming 91 per cent of our to leave their permanent roles for an in- expected as many of the other disciplines respondents want to take on (22 per cent) terim post. The most popular three rea- often report into external communications, as the umbrella communications function. What are the industries considered most and least popular for current Yes 72% communicators? No 28% Our study found that the energy and water, non-profit and fast-moving consumer goods industries were currently the most appealing to European commu- Would you be willing to relocate to nications professionals, whilst financial a new country? services and wholesale businesses fared worst as the two least popular. We believe or maintain (69 per cent) responsibility this is due to a shared perception, right- for managing people. With communica- ly or wrongly, that these industries take tions now a firmly established profession, greater corporate and social responsibility, with increasing strategic importance, the are more values-driven and offer a better opportunity to line manage, lead teams work/life balance. As CSR and wellbeing and direct entire divisions is increasingly sons in support of interim positions were: continue to rise up the business agenda appealing to an ever ambitious contin- taking control of work/life balance, im- so do they on the list of considerations for gent of professional communicators and proving remuneration value and build- communications professionals, and never is now more often than not seen as natu- ing up a portfolio of skills in a shorter more so than when moving organisations. ral career progression. timeframe. Certainly for our clients the VMA Group is always careful to counsel Is company size important to to- flexibility of an interim solution can pro- against assumptions and considers every day’s communications professionals? vide a range of benefits, including quick organisation and brief, like our candidates, Yes, size does matter. 81 per cent of access to a specific skillset, cost-effective on their own merits, presenting both all respondents indicated they would consultancy and support and/or a bridge strengths and weaknesses, the pros and want to work for a company the same to cover maternity leave or the period cons. Coercing candidates into unsuitable size or larger. Whilst this may appear to when hiring for a permanent position. roles or failing to provide all the facts does present a significant challenge for small- How do communicators view the not make for positive, long-term relation- er businesses, particularly those with a recruitment process and the role of ships with either candidate or client! domestic reach (our respondents already agencies?

communication director 4/2015 31 Career

What size company Smaller 19% would you like to Larger 43% move to if you ever Same Size 38% change jobs?

As a specialist recruiter, looking to build relationships on a basis of understanding and trust, we were reassured to see that the communications community clearly recognises the added value of being represented, and supported, by a spe- Willem de Ruijter cialist recruitment consultancy. With 68 Executive director Europe per cent believing they are better served VMA Group by a specialist than a generalist and 73 Final thoughts? per cent trusting that a good agency We are seeing a seismic shift in the An ex-fast moving consum- puts their interests first and places them way communications and marketing er goods marketing and where they are best suited. professionals are not only operating but communications director, With an overwhelming 86 per cent in how they are managing their own pro- Willem de Ruijter has worked stating that ‘a good recruitment process fessional development and career choic- in recruitment since 2008 and headed a Netherlands based makes a company more attractive to es, and, in parallel witnessing the dawn firm specialising in recruitment work for’ and 69 per cent agreeing that of much more internationally-focused and headhunting of commu- ‘the reputation of the client is directly recruitment, in what is now a candi- nications, marketing and sales affected by the actions of the recruitment date-driven market. The mobility of tal- professionals. He then moved agency’, who a company partners with to ent within the sector is growing – and the to VMA Group where he now is resource their communications talent is desire for more experiences is emerging executive director for Europe. vital to not only securing the brightest as a top feature for those seeking new He heads up operations across and the best in the business but also for roles, whether that is in their home coun- Europe with offices in Brussels, sound reputation management. try or further out. • Amsterdam, Paris and Frankfurt.

52% 42% 37%

Would you consider Yes moving into an No interim role?

All respondents Not including VMA Respondents Group’s active currently employed candidates in permanent positions Photo: Private Photo:

32 communication director 4/2015 Internal

Power to the people

Employee engagement can be driven through a shared sustainability mission. It’s the task of communication directors to drive this process.

By Joanna Sullivan

ow to recruit and retain the brightest minds? Fo- cus them on the ultimate H mission of global sustainability. They get to speak authentically about their work and in doing so they build trust with their peers. So far so good. But here’s the chal- The challenge for communication lenge. Employees will fully engage only directors is to join forces with human re- if the organisation is truly sustainable in sources around an aligned sustainability the way it handles the public policy agen- engagement agenda. This will boost en- da, its NGO detractors and global sustain- gagement within and reputation outside. ability challenges. Companies today are Employees can become champions for either part of the problem or part of the the organisation, helping to broadcast to solution. If they are part of the solution, the world why it exists and how it helps they are actively engaged in addressing address the global challenges of climate sustainability challenges. change, deforestation, water scarcity, Evidence shows that companies waste, pollution and so on. This army genuinely allow employees to share the of authentic communicators is hyper-en- sustainability communication mandate. gaged and promotes a positive sustaina- Communication directors must heed the bility reputation with peers. call for sustainability engagement from employees and be prepared to lead on sustainability communication. Photo: www.thinkstock.com Photo:

communication director 4/2015 33 Internal

Fasten your seatbelts, ing. Sustainability engagement training the future starts here addresses this challenge by enabling "This army employees to realise for themselves the Millenials won’t be silenced and they meaning and value of sustainability. It are taking over the workplace, worldwide. of authentic allows them to align the company val- If you don’t have them in management communicators is ues with their own personal values. It yet, then get ready for change. If not, unleashes purpose to their work and change will be thrust upon your commu- hyper-engaged and passion in their communication. They nication strategy and you may no longer become engaged. And they become nat- be in the driving seat. promotes a positive ural communicators. Millenials are hyper-connected. They sustainability are creating a sharing economy where Doing the right information flows for free. Organisations reputation with can tap into this resource as an authentic thing communication channel out, but also as peers." a powerful engagement mechanism in, to Sustainability engagement leads to create authentic content that builds and business transformation. Things feel maintains trust. sharpen their focus on both engagement different both inside and outside. People and sustainability. That puts pressure on feel inspired and committed. They have Engaging millenials traditional companies to embrace sus- purpose in their work and have space to tainability, responsibility, open commu- cross-fertilise ideas and innovate within nication and other positive impact goals the framework of the strategic vision. In 2015 for the first time globally, the that inspire their employees. Every organisation has a social re- millennial generation – people born be- sponsibility to practice authentic sustain- tween 1980 and 2000 – outnumber their Engaging through ability. Not just to have employees listen older colleagues in the workforce. This to public relations messages, but also to demographic shift is changing multiple purpose create the space for them to ask questions aspects of the world of work as compa- and engage in meaningful conversation. nies grapple with how to recruit, engage It used to be that people who wanted Engaged employees are able to listen, ask and retain these young professionals. impactful jobs went to work in NGOs. But questions and advocate the sustainabili- Millennials differ from their older with the rise of B-corporations – social ty roadmap to suppliers, customers and colleagues in their outlook on the work- and environmentally driven companies other stakeholders. ing world. According to a Deloitte Millen- – and with more focus in businesses on Employees talk about their organi- nial Survey published in 2014, Generation the triple bottom line, people can now sation as a shining example of 'doing the Y – as this demographic is also known find purpose and impact in for-profit jobs. right thing’. They are proud because they – has big demands and expectations of Millennials expect organisations have purpose. They are part of something the future workplace. Millennials are to operate on a more transparent and much bigger and that feels positive. And spearheading a broad shift amongst peo- sustainably oriented basis. Because mil- they have plenty of evidence to support ple seeking meaning in their jobs, and lennials have grown up with cause mar- the sustainability narrative. A free infor- working toward creating a better world. keting, organisations are obliged to take mation flow within organisations feeds Millennials want to work for organ- positions on vital societal issues. It’s not the 24-7 constant free-flow of information isations that foster innovation, develop enough to fix their supply chains. Large on social media. Finally every employee their skills and make a positive contribu- organisations that do not fully embrace has the capacity to engage. tion to society. Millennials will shake up sustainability at the core will find it hard- the work force, Deloitte says, as they grow er to recruit talent. Embracing sustaina- Engaging with to be nearly 75 per cent of the global pool bility goals and culture is thus key to an of workers by around 2025. organisation’s long term success. integrity Yet currently two thirds of the millen- Yet few organisations have adopted nial generation are disengaged at work. an official employee engagement policy The era of greenwash is coming to an In response to a desire to recruit and re- around sustainability. Part of the reason end. Transparency, social media and the tain these smart young minds, a grow- is that engaging a majority of employ- free-flow of information means that what ing number of employers are starting to ees across a large company is challeng- happens on the other side of the world is

34 communication director 4/2015 Internal

today’s news everywhere. The millenials Case study 2: are making sure of it. The days of spin Asia Pulp and are over. Paper What is replacing the creaking old green veneer that many organisations once used to disguise a poor environmen- In 2013 Conscience Consulting worked tal record is a new shiny green core. One with partners in The Transition500 Alli- that is honest because it is built around a ance to support the transition of Asia meaningful sustainability strategy. How Pulp and Paper Group (APP) towards a is the company playing its part to ad- zero deforestation commitment. APP is dress global environmental challenges? It one of the biggest producers of pulp, paper is around the sustainability journey that and packaging in the world. APP under- Joanna Sullivan employees want to engage. And as sus- took sustainability engagement training Author, strategy consultant tainability ambassadors, employees can by gathering small groups of employees boost brand reputation more than any across functions to discuss and integrate Joanna Sullivan is the author of Creating Employee Champions public relations campaign can manage. the company’s zero deforestation com- Through Sustainability Engage- It’s for communication directors to mitment. Employees could openly share ment (DoSustainability, 2014). lead the call for sustainability engage- ideas on sustainability and genuinely em- Joanna is also the chairwoman ment from within their own organisa- brace the company’s sustainability vision and founder of Conscience Con- tions. The future of corporate communi- and roadmap. sulting, a Brussels based public cation starts here. policy and communications Employee agency helping global clients Changing business, embrace environmentalism champions and effective engagement. for good: Sustainability Conscience Consulting is a champions With a wealth of experience of sus- partner of global sustainable tainability engagement, I was asked to development consultancy Global organisations such as Airbus write a book so I could share valuable network The Transition500 and Asia Paper & Pulp have embraced insights. My book Creating Employee Alliance, with offices inN orth sustainability engagement, with tangible Champions: How to Drive Business Suc- America, the EU and Asia. results for employee engagement and cess Through Sustainability Engagement stakeholder engagement. Training was published in 2014. The book lays out the challenges and solutions to Case study 1: engaging employees through purpose. Disengaged employees cost companies Airbus billions in lost productivity and lead to high turnover rates, so feeling a sense into authentic brand ambassadors, and In 2012 Airbus, the European aircraft of purpose does matter. Making sus- companies into movements. The evi- manufacturer, sought to engage with tainability contribution part of the job dence is that sustainability engagement the leaders of Europe’s environmental description means employees are driven is achieved through a simple three-step non-governmental organisations on is- towards collaboration, community and method that incrementally harness- sues related to the environmental sus- commitment. And the organisation is es employee energy behind the organ- tainability of air travel. European NGOs better positioned to anticipate and adapt isation’s sustainability strategy. It is a such as CAN Europe, Friends of the Earth to changing market conditions. unique tool for organisations that want and WWF, had been actively campaign- My book aims to transplant NGO to make that quantum leap of integrating ing for policy action on climate change, DNA into business DNA, so business sustainability into the soul of a business, biofuels sustainability, noise and air pol- leaders too can inspire 'hearts and minds' achieving a paradigm shift in sustainabil- lution. In my role as owner and director engagement from employees, foster dy- ity engagement. • of Conscience Consulting, I was to kick- namic commitment to meet sustain- start the Airbus journey of sustainability ability goals and equip their teams for engagement. genuine stakeholder engagement. This

Photo: Private Photo: effective method transforms employees

communication director 4/2015 35 Design

The strategy behind disruptive innovation

Design is no longer about objects, visuals or spaces; it is about systems, strategies and experiences. That’s why it is the perfect vehicle for corporate innovation.

By Gjoko Muratovski D esign and business are intrinsically linked together. Early designers came from many backgrounds and they were introduced to the profession because of their ability to contribute artistically or constructively to the industry’s needs for the development of products and advertising communications. Over time, as business models began to evolve, the field of design evolved as well. Designers moved from being stylists, to becoming professional ‘problem solvers’. With time, for many leading businesses, simply developing goods and services was no longer seen as enough in a highly competitive global market. As a

36 communication director 4/2015 Design

“In their pursuit The changing of disruptive landscape of design innovation, many businesses started In the late twentieth and early twen- looking at the ty-first century, new economic developments have changed the concentration of process of design the design capital, and subsequently the as a source of dynamics of the profession as well. The world was divided into one part that de- inspiration.” signs (the West) and the other that man- ufactures (the East). Under the pressure of increased international competition, entire production systems were dismantled and outsourced to companies in the Far East. Centralised production for a global The rise of the market also meant that goods that were corporate once distinctive are now ‘standardised’ designer to be better suited for the taste of the mass market. While this is economically beneficial for large manufacturing con- With manufacturing largely moving result, the new stage of business inno- glomerates, we have witnessed a number to the East, and with the West moving vation was focused on creating experi- of ecological and social disadvantages to a knowledge economy model focused ences and developing systems for living, associated with this business model. For on services and technology development, working and entertaining. This called for emerging economies with new manufac- many product designers found them- new currents of thinking that would chal- turing capabilities, the lack of regulations selves in a situation where they had to lenge existing business models by using and general disregard for environmen- reinvent themselves and apply their skills an approach which is now referred to as tal issues have caused alarming levels in other industries in order to remain ‘disruptive innovation’ – an innovation of pollution and waste. For established relevant. The concept of design thinking, that can transform and revolutionise economies, the loss of their production which is now widely accepted in a range of an existing market, product or a sector capacity turned them into consumerist business and social contexts, derived pre- by replacing complexity and high cost societies. In addition to this, the collapse cisely out of this economic shift. A design with simplicity, convenience, accessibil- of the American and European financial methodology, once used for designing ity and affordability. In their pursuit of systems brought further into question the products, is now used for designing sys- disruptive innovation, many businesses previous division of roles and labour. Yet, tems, processes, services, digital interfac- started looking at the process of design at the same time, all of these changes have es, entertainment, communications and as a source of inspiration. After several enabled design-led innovation to grow other kinds of human-centered activities. successful design-led innovations (such as and evolve further. As a result, in the past In return, some product design firms have Apple’s iPhone and Nintendo’s Wii game decade we have witnessed an increase in repositioned themselves as design and in- console), design quickly emerged on top of independent design thinking consultan- novation consultancies. the corporate agenda – but with one cru- cies, followed by a newly-found interest With the advancement of digital cial point of difference: design is now seen in establishing corporate in-house design technologies, we have witnessed further

: www.thinkstock.com Picture : as a field of thinking, rather than making. teams. changes in the design landscape. While

communication director 4/2015 37 Design

in the past it was mainly manufacturers who had in-house design teams working on product design and development, we are now increasingly seeing a rise of many PricewaterhouseCoopers corporate in-house design teams working Executive Summary on service design and digital design. Prior (PwC) to the emergence of the digital era, or even • In their pursuit of disruptive prior to the introduction of smartphones innovation, many busi- In 2010, the Australian branch of and social media, many companies were nesses look to the process the business consultancy PwC acquired dependent on print publications or tel- of design as a source of the boutique design firm The Difference evision to communicate their message inspiration. in an attempt to diversify and expand to their clients and the broader commu- their consultancy services. According to nity. This was a time when corporate • Design today is not only PwC, The Difference is a consultancy communication was a one-way form of about products or visuals, that specialises in working with public but about systems, strate- communication. The content for this type and private organisations on complex gies and experiences. of communication needed development issues that involve and affect multiple quarterly, or in most cases, once a year. stakeholders. PwC describes their now • S everal major corporations, This meant that there was no need for in-house design team, The Difference, as including Barclays, Deloitte designers working on these aspects of and PwC, have invested “experts in the process of collaborative, the work to be continuously employed heavily in design, appointing creative problem solving.” Their main by the company. Instead, they could be heads of design to develop role is to facilitate idea generation and outsourced and contracted only when customer experience. decision-making sessions for clients in necessary. However, corporate commu- order to “explore ideas, develop solutions nications today are different. For most and capitalise on opportunities in unique people, the office building, window dis- and powerful ways.” plays and commercials are no longer the The New Zealand branch of PwC ac- first thing they see when they choose to agencies is now increasingly becoming quired the UX design consultancy Opti- interact with a company. It is not even one that is corporatised and centralised. mal Experience in 2014 in order to grow the company website that comes across As big corporations started to see design the digital side of its consulting practice. as the first point of contact; it is the so- as a critical corporate asset, they also New Zealand’s chief executive officer of cial media profile of the company fol- began to understand that design is not PwC, Bruce Hassall, says: lowed by their digital interface as seen something that should be delegated to “Our acquisition of Optimal Experi- on a handheld device. With the internet third party design firms on an ongoing ence places us in a unique position to dominating our lives, businesses have basis. The growing trend for integrating offer customer experience and digital no choice but to communicate in real design into the overall corporate strategy, consulting services from strategy devel- time with their stakeholders, in a forum the need for confidentiality and the con- opment right through to execution. defined by ever-changing digital technol- cern of issues related to the ownership of Digital is no longer just about tech- ogies. The rise of the corporate in-house the intellectual property, means that se- nology, and instead, it has become short- design teams comes primarily out of this rious businesses can no longer outsource hand for ‘the world has changed’. It has necessity. something that is seen as a strategic brought about a new mindset to doing resource. That is why major business- business, bringing us closer to our customers to give more immediate, person- Design as a es – including many of the Fortune 500 companies – started investing in their alised and collaborative experiences. Dig- strategic business own design capabilities. In fact, even con- ital is now how we live day-to-day.” resource servative financial businesses that have By venturing in this area, PwC – once never before been associated with design a traditional business consultancy – have As design is increasingly being recog- started building their own design teams entered in direct competition with de- nised as a strategic resource, the sphere of and hiring design executives in order to sign studios and agencies that provide influence that designers’ have in business build design thinking capabilities, as well design thinking and digital design ser- and society is changing. What used to be as better User Experiences (UX) for their vices. What is more, they are not the only a field dominated by an array of inde- clients and better User Interfaces (UI) for ones in their sector that have chosen to go pendent design studios and large design their products. down this path.

38 communication director 4/2015 Design

Deloitte to which they appointed Derek White, In 2011, the financial, risk manage- who prior to this was the chief custom- ment, tax and auditing services consul- er experience officer at Barclays. White tancy, Deloitte, acquired the Australian has been involved in various strategic boutique design firm Aqua Media. Short- roles with Barclays since 2005 and has ly after, in 2012, they recruited designers experience working in the financial sector from the Australian design consultancy since 1996. His new role signifies that Bar-

Second Road to help them develop their clays are serious about their intentions Gjoko Muratovski Tongji University/Auckland in-house design thinking team. Accord- of positioning themselves as a design-led University of Technology ing to Business Review Weekly, Deloitte business focused on customer experience. claims that several of their big auditing What is more, in addition to this, Bar- Gjoko Muratovski is the found- successes in 2011 and 2012 are a result of clays are also adapting entrepreneurship ing head of the communication applying design thinking to their audit as their guiding principle. According to design department at Auck- methodology. The main benefit from uti- the White: land University of Technology lising design thinking in their industry, as “The thing that sets Barclays apart and guest professor in design Deloitte sees it, is changing the way finan- at the moment is, all the way to the top, and innovation at Tongji cial services are experienced. According to the chief executive officer, [people are] University, Shanghai. He has to their chief marketing officer, David embracing the entrepreneur start-up worked with various organisa- Redhill: “In commoditised markets, like approach in which design plays a fun- tions such as Toyota, Deloitte, audit and tax, experiences are increasing- damental role. Such support is demon- Yahoo!, Greenpeace, UN Asso- ly the currency of differentiation.” strated through active engagement in ciation of Australia and more. Furthermore, in addition to making projects.” This article is part of a large design thinking a part of their financial competitive intelligence report consultancy services, Deloitte now also Gjoko is developing titled Xero Paradigm Shift: Report on the has a branch called Deloitte Digital that New Role of Design in Business acts as a full service agency that offers and Society. The full report will digital design, strategy, social media and A particularly notable example of be published in December 2015, digital development services related to a design-led startup that became a suc- in She Ji: The Journal of Design, emerging technologies. Pioneered in cessful business enterprise is Xero, an ac- Economics, and Innovation. Australia, Deloitte Digital now operates counting software and online bookkeep- through 20 studios spread across the ing company founded in 2006 in New United States, Canada, Europe, Japan, Zealand. In the case of Xero, design has India, South Africa, Southeast Asia and proven to be not only a powerful mar- New Zealand. Their team includes crea- ket differentiator, but also a catalyst for tive designers, channel strategists, engi- business innovation. They were so suc- Closing neers, architects and product specialists. cessful with their new business concept remarks that in 2015, Forbes listed them as the Barclays Most Innovative Growth Company in the Design today is no longer about de- World. According to Philip Fierlinger, Xe- signing objects, visuals or spaces; it is ro’s co-founder and head of design, this is about designing systems, strategies and The British multinational banking what sets Xero apart as a company: experiences. It is because of this way of and financial services company Barclays “Xero is not a software company, but working that design is now largely recog- has also been building its in-house design a UX company. (…) In contrast, our com- nised as a vehicle for corporate innova- capabilities. Their head of design, Rob petitors try to solve problems by giving tion. What makes designers working in Brown, developed the design team for people more software and technology, this area different to traditional designers Barclays from nine designers working which ends up making the experience is that they are not only trying to resolve solely in the retail business in November more frustrating and confusing. (…) The problems that are assigned to them, but 2012 to 67 designers working globally in key to great design is not about making they are also trying to prevent problems every business unit, across all disciplines software look pretty but getting the tech- occurring in the first place by assuming by December 2013. They also introduced nology and software out of the way as executive roles within the businesses

Private Photo: the role of chief design and digital officer fast as possible.” themselves. •

communication director 4/2015 39 Theory

PR goes pop How popular culture challenges the professionalism of public relations

By Kate Fitch

40 communication director 4/2015 Theory

Much of the scholarship on public relations in popular culture has explored the various ways in which public relations is represented, primarily in television and film. Scholars often point to the “failure” of such representations to portray the reality of the industry. Yet Aus- tralian Roxy Jacenko, who owns Sweaty Betty PR, a Sydney-based lifestyle and fashion agency and manages lucrative social media accounts for her four-year old daughter Pixie, writes novels about My a fictional fashion publicist called Jazzy Lou, who runs a Sydney-based lifestyle favourite fictional public relations prac- “No one really and fashion agency and manages lucra- titioner, the vile Malcolm Tucker of The tive social media accounts for her daugh- Thick of It (2005–2012), was voted only the thinks Eddie ter Trixie. Jacenko claims the novels are second most popular practitioner, losing “inspired by her seven-year career in the to CJ Cregg in The West Wing (1999–2005), Monsoon or fashion PR industry” and “the perfect in a global industry survey earlier this Malcolm Tucker or research for anyone looking to break in to year. Tucker, played by the current Doctor the cut-throat world of fashion PR” (see Who, Peter Capaldi, is so nasty, manipu- Nan Flanagan are www.sweatybettypr.com/read-us). My lative, abusive and foul-mouthed that he students love them and Jacenko’s pro- is almost unwatchable (but also highly truly representative motion of the books intentionally blurs entertaining). My personal runner-up is of the public the lines between fiction and reality. Nan Flanagan, played by Jessica Tuck, from the television series True Blood relations A more complex (2008–2014). Flanagan, spokesperson for the American Vampire League, is the con- industry.” representation summate media performer: articulate, rational and witty until her “true” identity Given that public relations is ubiq- is revealed as manipulative, malevolent uitous in everyday life, its increasing and deceitful. And a close third is Edina on public relations guru Lynne Franks, representation in popular culture is not Monsoon, played by Jennifer Saunders in who (unlike Eddie) successfully ran a UK surprising. In 1999, US academic Karen the British television comedy Absolutely public relations consultancy that repre- Miller found in a survey of films and Fabulous (1992–2012), who is a remarka- sented leading fashion designers and novels spanning 1930 to 1995 that public bly self-obsessed, celebrity-seeking, Bol- retailers for 20 years. Malcolm Tucker relations was depicted as either “embar- ly-swilling and shallow individual. So is allegedly based on several characters, rassingly easy” (in that “a phone call or a opaque is the actual work Monsoon does, including Alastair Campbell, the real-life cocktail with a reporter is all it takes”) or that she struggles to articulate it to her director of communications for former impenetrable “magic.” Nearly two dec- ever-sensible daughter Saffy: “PR! I PR British prime minister Tony Blair, and ades later, we find that public relations things. People. Places. Concepts. Lulu!” who was called many things including features prominently in popular culture These and many other representa- “The Darth Vader of Whitehall.” (There and that audiences have considerable tions of public relations in popular cul- is some dispute about this: Capaldi stated understanding of public relations tech- ture are highly amusing. Of course none that Tucker was based partly on Peter niques and the genre of spin. Television represent the “ideal” practitioner promot- Mandelson, a former director of commu- programmes featuring public relations ed in textbooks and by professional asso- nications for Britain’s Labour Party and include comedies such as Absolute Power ciations and the audience does not really subsequently a government minister, and (2003–2005) starring Stephen Fry as the expect them to. It is confusing, though, that he drew inspiration for the role from director of a London-based public rela- when the creators of fictional characters Hollywood producer Harvey Weinstein). tions agency, Prentiss McCabe, and Uto- point to real practitioners as their inspi- Nan Flanagan is a vampire (so patently pia (2014–2015) (renamed Dreamland in

: www.thinkstock.com : Photo ration. Eddie Monsoon is loosely based not real). the UK and the US), an Australian series

communication director 4/2015 41 Theory

set in a government department where more complex representation of public – based on a survey of 126 films and tel- Rhonda, the media manager played by relations work due to the efforts of pro- evision series featuring public relations Kitty Flanagan, describes her role as “I fessional associations such as the Public – also point to an uncomfortable truth message.” Scandal (2012–) features one of Relations Society of America and a cam- about the industry in terms of the gen- the few African American female leads paign educating screenwriters about the dered stratification of public relations in network television, Olivia Pope, played role of publicists. Indeed, Ames closely work. Indeed, concerns about the lack by Kerry Washington, as a former White links the fictional portrayal of celebrity of women in senior roles and an ongoing House communication director now run- press agents with the actual work in the gender pay gap, combined with the lack of ning her own crisis management firm. image and reputational management diversity within the industry, are persis- Other political television shows fore- of Hollywood stars. Nevertheless, most tent themes in trade media. The margin- grounding public relations include Spin scholars lament the lack of connection alisation of promotional work occurs be- City (1996–2002); The West Wing (1999– with practice together with the failure of cause the industry – through professional 2006); The Thick of It (2005–2012); and fictional portrayals to promote the indus- associations but also education institu- Veep (2012–). Even reality shows about try as professional and strategic. tions – does not wish to claim unethical public relations such as Kell on Earth Much of the scholarship on public or technical activity that challenges the (2010); The Spin Crowd (2010); and PoweR relations and popular culture is un- social legitimacy of public relations and Girls (2005) are arguably a kind of fiction. claims for professional recognition. Promotional campaigns engage audiences and extend the narrative through ad- The transformative potential ditional online content and social media “True Blood and employ – and thereby foreground of popular culture – public relations techniques. For exam- offers multiple ple, the DVD extras and additional online potential readings No one really thinks Eddie Monsoon features for True Blood included a White or Malcolm Tucker or Nan Flanagan are House press conference; websites for the of public relations truly representative of the public rela- American Vampire League and their tions industry. Eddie can barely articulate opponents, such as the fundamentalist that both engage what she does. Malcolm abuses everyone Fellowship of the Sun church and citi- with, resist and and everything. Nan transforms into an zen journalists’ sites such as vamp-kills. evil, black-clad killer. Practitioners in Ab- com; press releases; advertisements for challenge existing solute Power make up diseases to restore vampire consumers; and public service the image of one client, and advisors, announcements to be downloaded and – and multiple press teams and public relations officials shared. potential – in various political dramas relentlessly Joe Saltzman, a professor and direc- spin in response to public opinion polls tor of Image of the Journalist in Popular meanings.” to hide genuine areas of concern and re- Culture (IJPC), surveyed 222 movies and frame media coverage and to promote 105 television programmes from 1901 to government ministers and policies. None 2011 and argued, like Karen Miller, that a are role models and none would encour- better understanding of how audiences derpinned by an ongoing concern that age any rational person to pursue a career respond and interpret fictional portray- fictional portrayals do not express the in public relations. Yet more than one als and the extent to which public per- reality of the industry. Public relations academic researcher has attributed stu- ceptions of public relations are affected scholars note the lack of gender and cul- dents’ misconceptions about the public is needed. At the same time, Saltzman tural diversity, status, professionalism relations industry to its misrepresenta- found a growing polarisation between and ethical behaviour of screen practi- tion in popular culture. In contrast, the grasping press agents and more profes- tioners. Australian academic Jane John- University of Alabama’s Meg Lamme ar- sional and ethical practitioners in recent ston, for instance, laments the negative gues that rather than focusing on the ab- screen portrayals. Another US academic, and limited portrayal of female practi- surd in popular culture, educators could Carol Ames, concluded that public rela- tioners, noting that it often reinforces employ mass media representations to tions was more positively portrayed in existing stereotypes in that women on teach critical moments and to explore the two decades since Miller’s landmark screen perform technical, promotional multiple aspects of public relations in survey. Ames attributes these shifts in work and tend to be white, single and that they offer fertile ground for under- both the image of public relations and the middle class. In fact, Johnston’s findings standing the messiness of actual practice

42 communication director 4/2015 Theory

and the interdependence of press, politi- management, as well as engaging with cal and professional relationships. gendered discourses of public relations The transformative potential of as a vocation suitable for “gay guys and popular culture to critically engage girls” to quote recent media stories. Such with public relations discourse is often discourses sit uncomfortably with the

neglected in academic scholarship. But Kate Fitch professional rhetoric of public relations. perhaps that is precisely the issue: the Murdoch University Yet, they offer alternative discourses to industry struggles to regulate or even the constraints of professional perspec- define public relations and the field is Dr Kate Fitch is academic chair tives and construct other realities of the slowly being cannibalised by competing of public relations at Murdoch industry, recognising the inherent contra- fields such as corporate communication, University in Perth, Australia, dictions between professionalism, corpo- crisis communication, marketing, mar- where she has taught since rate social responsibility, ethics and the keting communications, organisational 2001. She has published on eth- reality of neoliberalism and the market communication, public affairs, publicity ics, pedagogy, gender, history logic of an occupational practice that is and promotion and stakeholder engage- and culture in relation to public firmly linked with the development of ment. Its semantic instability means that relations; her current research capitalism. popular culture offers rich interpreta- investigates representations of Australian female practitioners tions of potential meanings. The lack of in the twentieth century. Kate Through the television attention to promotional activity (such is on the editorial boards of as the marginalisation of publicity and screen Public Relations Review, Public event management and even celebrity Relations Inquiry and Prism. management) among public relations Her book, Professionalizing Popular culture does not offer a mir- scholars may stem from the fixation Public Relations: History, Gender ror but a distorted lens through which with representing public relations as a and Education will be published diverse – and at times contradictory – by Palgrave in 2016. meanings of public relations can be con- structed. Audiences do not consider vam- “Audiences pire dramas to be real. However, vampires represent the other and therefore offer a bring their own As I wrote in an academic paper, True potential narrative about contemporary Blood offers multiple potential readings and collective anxieties. Nor do audiences meanings and of public relations that both engage with, seek an accurate representation of the engage playfully resist and challenge existing – and mul- public relations industry in popular cul- tiple potential – meanings. For example, ture. Nevertheless, audiences bring their with various Flanagan transforms from the pastel own meanings and engage playfully with suit-clad, middle class, articulate media various representations of public rela- representations of spokesperson who employs civil rights tions. The use of humour and irony, in public relations.” discourse to advocate for vampire rights; particular, subverts normative expecta- to the representative of a human-friend- tions of ideal public relations. ly front organisation to disguise the real So what, if anything, can we learn strategic management discipline that power and designs of the shadowy “Au- from fictional representations of public ignores activity that arguably could be thority,” in a classic piece of greenwash- relations? And are we asking the wrong conceived of as public relations. For ex- ing; before morphing into a black leath- question, given that popular culture is ample, professional public relations is er-clad enforcer who employs military primarily entertainment? In fact, I think not perceived to be that represented by commandos to terminate her opponents. these diverse fictional representations Bridget Jones’ inept publicist, played by After the fourth series, Flanagan is re- engage with multiple understandings of Renee Zellweger in the films based on the placed by “gay-Vampire-American,” Steve public relations and potentially offer im- books by Helen Fielding, whose playboy Newlin, the former vampire-hating pas- portant and critical insights into public boss marginalised her work as “fannying tor of the Fellowship of the Sun church. relations work and meaning. That’s not about with press releases” – except that I These representations engage with dif- why I watch them, though. I watch them think it is. (Disclaimer: I once worked as ferent public relations discourses: public for fun. • a publicity assistant in a London-based relations as advocacy, spin, manipula-

Photo: Private Photo: book publisher.). tion, propaganda, and image and media

communication director 4/2015 43 A propaganda of fear

Recent terrorist attacks around the world – including Paris, Beirut and Metrojet Flight 9268 – were marked not only by their cruelty but also the use of social media before, during and after the attacks. But can social media also be used to fight back against the terrorists?

By robyn torok

S ocial media is not just an important part of violent extremism and terrorism: it is central to it. It would be difficult these days to find a terrorist who has not had significant exposure to extremism on social media. While there are many other forms of terrorist ideology, this article will focus on the most prominent threat of Islam- ic-based extremism. From the humble beginnings of a few web pages to a sophisticated global social media strategy, the online growth of Islamic extremism and terrorism has been exponential. Not only

communication director 4/2015 Social media

has the volume of material significantly the paris attacks increased, but so has the level of sophisti- cation. Multiple Facebook pages, profiles While the average person was getting and groups, Twitter real-time updates by “Social media on with life in Paris before the terror the Islamic State in Syria, high quality is not just an bombings and shootings on No- propaganda videos posted on YouTube vember 13, Twitter threads in Arabic and even glossy online magazines are all important part of from the Middle East were urging for continually being developed, posted and attacks to be launched upon coalition updated. It all appears like an unstoppa- violent extremism forces in their home countries. “Advance, advance – forward, for- ble tide of unsettling influence that is set and terrorism: it ward” they said, regarding Paris. to plague the world for years to come. Iraqi forces had warned coalition There is no doubt that the global is central to it.” countries one day before the attack picture looks grim in regard to Islam- that IS’s leader Abu Bakr al-Baghda- ic extremism and terrorism especially di had called for “[…] bombings or with the rise of Islamic State in Syria chological warfare with the aim to ‘win assassinations or hostage taking in and Iraq. However, it is important to take hearts and minds,’ a phrase that the the coming days”. In addition, social a step back and consider the nature of west has itself used as way of defining media message “Telegrams” from The this problem – or perhaps more correct- its strategy. Understanding Islamic ter- Islamic State Media Center’s Al-Hayat ly, phenomenon. By understanding the rorism and our response to it as a form were telling that something more message and mechanisms at work, better of psychological warfare is very impor- sinister may be afloat, or at least in strategies can be devised to help combat, tant given that it acknowledges the active the works. In late September, 2015, IS contain and reduce the size of the threat. and relentless strategy of utilising social made use of the new channels tool, However, any claims about eliminating media by extremists to reach a global on Telegrams, setting up its very own such a threat are short-sighted, simplistic audience. channel called Nashir, which trans- lates as “distributor” in English. and most importantly, inaccurate. Before we look at ways of framing the Techniques of terror Hiding in privacy use of social media by terrorists, it is important to first understand their message. Launched in 2013, Telegram is an Islamic extremism can be divided into Social media is a powerful tool to con- app that can be set up on almost three broad narratives. First is the narra- vey these messages for several reasons. any device and allows messages to tive of grievance that states that the west First is the strong integration with other be sent to users, with a strong focus has persecuted and terrorised Muslim forms of media including text, pdf files, on privacy. IS utilises the service of nations as well as exploited them. What is graphics and video links. Second is the Telegram channels because it is more most striking from studying these griev- ability to connect with likeminded indi- difficult for security agencies to ances online is the fact they are all pre- viduals and find those with similar beliefs monitor and disrupt than other plat- sented as cumulative and interrelated as quickly and easily. Third is the interactive forms such as Twitter or Facebook. a giant threat to Islam itself. Local threats nature of social media that allows people An important tool that agencies use are integrated into this global threat and to interact with each other in real time on to tackle violent extremism is that presented as part of a historical narrative a regular basis. Finally and perhaps most of counter-narratives. The aim here of persecution. Second, the need for ac- significantly is the often addictive nature is address and challenge propaganda and misinformation being dissemi- tion is promoted through the narrative of of social media that lends itself to regular nated by IS to potential recruits or IS jihad, which is presented as violent action engagement often in large blocks of time. sympathisers. This is used as a form of designed to rid Islam of oppression as Social media is also critical to the way the disruption to the flow of information well as send a message to its oppressors. message is propagated. Two key ways in and recruitment process. But with Tel- The third narrative which is intertwined which these messages are propagated are egrams – where information moves in with jihad is that of martyrdom. All who propaganda techniques and the use of one direction – it makes it harder to undertake jihad must be prepared to be institutional power. counter jihad propaganda and lies. martyred for their cause. More than this, Propaganda techniques have tradi- Telegrams is used by IS not just to martyrdom is something that should be tionally been framed in terms of a nation post propaganda but to spread train- actively sought and brings many rewards. or large organisation. However, for this ing manuals, advice on how to obtain Regardless of the perspective taken, article propaganda is simply a technique and import weapons, how to make…

: www.thinkstock.com : Photo getting the message out is a form of psy- used to propagate a message. Several Continued

communication director 4/2015 45 Social media

frameworks for propaganda techniques bombs and how to perform single exist, with many overlapping. Perhaps the jihadi attacks on individuals with most pertinent is the use of white prop- household equipment. It has posts aganda which is similar to card stacking: on launching attacks at soft targets without having to make up overt lies, it and the activation of lone-wolf style attacks, or to give the green light for focuses on one side of the argument. Most Robyn Torok small terrorists pockets or cells within significant is that of grievance narratives: Edith Cowan University, the community to conduct their media stories of children being killed in Australia conflict zones as well as abuses of power onslaught. Inciting acts of violence is a key element of IS’s radical religious by military forces are quickly picked up, Dr Robyn Torok research- ideology. It mandates that its people linked to on social media and circulated es social media and online are following the “true” path of Allah widely, thus promoting the victimisation radicalisation at the Security and are helping to bring to pass a of one group of people. Research Institute, Edith Cowan great apocalyptic battle between Another key propaganda strategy University. The focus of Robyn’s coalition forces and “Rome”, which to used is to appeal to authority – for ex- research explores the way in them is the will of Allah. ample, Allah – and those who are recog- which social media is being used by jihadists as a form of nised as having authority to speak, such Social media advantage as radical clerics and those who have been an institution to govern behaviour of Australian recruits martyred. Becoming a martyr gives a per- Social media is prominent in recruit- to acts of martyrdom in the son’s words a platform after they have ment strategies used by terrorist west and abroad. Her research died and can be accompanied by images groups, in particular, IS. Facebook is includes on-line radicalisation, a key platform to gather young fans, and or video files. While other techniques counter-terrorism, policy, supporters and recruits to incite them such as stereotyping and making gen- intelligence, eschatology and to acts of violence by the means of eralities are common, the fundamental the impacts upon terrorist rad- propaganda and the use of Islamic strategy underlying all others is that of icalisation, narratives, national grievance. When it comes to real-time repetition. Key meta narratives of griev- security, Islamic state ideology orchestrating of terror events, IS ance, jihad and martyrdom are constant- and Middle East affairs. is adopting encrypted messaging ly repeated by a vast network of sources. applications – including Kik, Surespot, This concept of a network is fundamental Wickr and Telegram, as previously to the concept of institutional power. mentioned – that are very difficult to Institutional power is based on the more toward a form of moral refram- compromise or even hack. work of French historian and philoso- ing. Rather than seeing terrorists as not pher Michel Foucault. On studying psy- having a sense of morality, instead they What is advantageous for IS is that chiatric institutions, Foucault found that have a very different moral framework messages being sent have what is power was networked rather than being where killing in the name of God is not termed a “burn time” which means top down and that it flowed through all just moralit is an obligation of every Mus- they will be deleted after a certain who worked in the institution. My re- lim. From this, two key questions arise: time and will not show up on a search into extremism on social media how do terrorist recruiters achieve this phone or other device. This benefits shows a similar pattern, with a network change? And what can be done about it? recruiters as it means they can fly of power and discourses flowing through under the radar more readily which a multitude of pages. Although there are makes it more difficult for agencies to Future pacing key authority figures that are more signif- detect and prevent attacks. There has icant, their message still resides within a also been speculation that IS uses the PlayStation 4 network to recruit and given framework of the three key meta Terrorists use a concept in recruit- plan attacks. Belgium’s deputy prime narratives. Given the way the internet is ment called future pacing whereby they minister and minister of security and structured, social media is well suited to encourage recruits to look at what they home affairs, Jan Jambon, said Play- networked forms of power. can achieve in the future with a key focus Station4 was more difficult for au- Despite the social media saturation on jihad and martyrdom. Essentially, they thorities to monitor than WhatsApp by Islamic extremists there is still a great reframe the recruit in the future tense of and other applications. deal of moral inertia to overcome. While a given action and then reorient them some research has suggested forms of back to the present tense, with the mind- moral disengagement, my research leans set that the action has already occurred

46 communication director 4/2015 Social media

in the future. They use key statements to such problems. For example, in Australia After the Paris attacks create a picture of their future position as earlier this year laws were passed where an extremist or terrorist which is aimed internet service providers must retain Not long after the attacks in Paris, at directing their current pathway. Online personal details as well as information IS released an audio and written media forms are critical to this role. about data for a short period of time. statement claiming the attack as its Future pacing by terrorist recruiters While privacy concerns have been raised, own from command central. This was can only be effective if it operates as a these laws are subject to strict regulations systematically and widely broadcast type of isolated institution on social me- and can only be used where threats to across social media platforms. dia. Achieving this institutional isolation national security are involved. Coupled Contained in this statement were is not as difficult as one might think given with this is the tracking of social media future warnings that “[…] this is just that those prone to Islamic extremism by intelligence agencies. However, as the the beginning of attacks […]”. At the same time, a propaganda video are quickly embedded in a social media number of threats grows, the ability to entitled “What are you waiting for?” network that continually reinforces ex- track becomes more difficult. was circulated on Facebook, Twitter tremist discourses and ideologies as well Dealing with this problem will require and Telegrams. IS continues to use as limited exposure to competing ideas cooperation from both private corpora- social media as part of its terror or rationalities. In addition, research in- tions as well as coalitions of governments. campaign. Its aim is to maintain the dicates that people with more extreme At stake from a government perspective focus of its recruits and fighters within views tend to seek out similar viewpoints, is the security of individual nations as coalition countries. It also aims to thus reinforcing their extremism. well as global security. Meanwhile, cor- further recruit home-grown jihadists Extremists will not typically be dis- porations have financial and privacy in- to acts of violence while driving fear suaded from their beliefs by a single terests and any government attempts to into the heartland of European and grand narrative or creative pleas, but interfere with or regulate social media Western countries. While privacy is rather constant comparisons that are de- sites would undermine their profitability on everyone’s mind, encryption ap- signed to erode away at extremist ideolo- and just transfer the problem to another plications have gained momentum to gies and create a sense of disillusionment newly created social media platform. allow people to communicate without with radicalism. While this may sound One possible strategy is for social worrying about unwanted third party like a straightforward strategy in theory, media sites to use advanced algorithms access. Unfortunately, terrorists have also utilised these features as a means in practice it is much more problematic. to present alternative arguments. In the to go undetected in organising re- Thus, the final part of this article will be same way that music algorithms can sug- al-time operations and preparation for dedicated to ways of achieving this as well gest possible ‘likes’ in relation to a given terrorist attacks. Terrorists are ahead as potential roadblocks. song, social media sites could suggest al- of the game and we don’t want to be ternate views based on the type of materi- playing continual catch-up. al searched. These algorithms would not Counterarguments break any privacy laws and could serve to If terrorists are to continue using create measurement points to compare a these applications to arrange acts of Social media sites are cost free, global person’s level of extremism. Also, sugges- terrorism in a covert manner, then and not subject to government interven- tions of alternate considerations could security agencies need to be able to tions. Although these sites have policies help break the cycle of seeking out only balance the collection of information relating to the use of offensive material, like-minded extreme views. from technological advanced services this has not prevented an explosion of Is- Finally, it is important to note that with that of human intelligence. lamic extremist influence on these social there is no simple solution to the prob- Dealing with the threat of misuse of media sites. Even when extremist pages lem of extremists on social media. Mul- encrypted applications by IS and other or videos are removed, they quickly re- tiple strategies will be needed with co- terror organisations, would mean that law enforcement and agencies would appear under different names. There are operation between private corporations require access to encrypted com- also privacy issues to consider as well as and governments. The need to interrupt munications. While one could argue judgements that would need to be made the strategy of future pacing is critical, this may compromise data security about what constitutes an extremist or especially given the way extremism is and that it should also be assessed offensive piece of material. often developed in isolation. Naturally, alongside internet vulnerabilities, this Jumping into this complex minefield all strategies are premised on an under- must be balanced against the current is not something that large corporations standing of the messages and ways in climate of security threat both domes- or governments are keen to do. However, which social media is used to propagate tically and internationally.

Photo: Private Photo: there have been attempts to circumvent extremism. •

communication director 4/2015 47 Crisis

A guiding light

In a crisis, an ethical perspective can help public relations professionals guide their organisations – and their profession – to safety.

Of course, crisis management is not By Burton St. John the central aspect of public relations, but this public overemphasis of public relations as manipulative crisis spin points to something that does need better consideration: how ethics should be understood as baked into public relations, whether dealing with a crisis, planning a special event or strategising a social media initiative. That is, in all public relations ef- (for example, FIFA’s internal corruption forts, practitioners should be thinking of or GM’s defective automobiles). Pop cul- how to help a client ethically balance its ture – Wag the Dog, Scandal and The Spin needs versus the often disparate needs of T Crowd – all show public relations people various stakeholder groups and the wider here is little doubt that, when it comes making unsavoury choices in an attempt needs and expectations of society. This to public relations, the vast majority of to manage crisis. Even some books on calls for much more than understanding the public receives the message that the public relations – PR! A Social History of codes of ethics. Instead, public relations field is about managing crisis. It’s right Spin, The Father of Spin, Spin: How to Turn practitioners put ethics into daily prac- there in the term often used by jour- the Power of the Press to Your Advantage tice when they 1) understand the motives nalists, Hollywood screenwriters and – emphasise a manipulative damage con- and goals of a client, 2) know the values (unfortunately) some in the field: spin. trol aspect of the practice. Not surprising- and aspirations of key client stakeholders Journalists criticise spin whenever they ly, a 2014 PR Week survey found that, in and, 3) account for how the client’s pow- point out how organisations attempt to the UK alone, 78 per cent of respondents er in this relationship presents oppor- downplay the negative and emphasise thought that most public relations cam- tunities for, and challenges to, working any possible positives of a crisis situation paigns were simply spin. toward consensus.

48 communication director 4/2015 Crisis

That broader picture established, one can look at crisis management as a key (but not central) area where public relations can show its ability to help the client ethically work toward a more mutually beneficial end with stakeholders who may become, or are, adversely affected. Burton St. John Note that this description is quite dif- Old Dominion University ferent from the tone offered when one Burton St. John III, APR, is asso- describes public relations as manipula- ciate professor of communica- tive “spin” – that characterisation of pub- tions and associate chair of the lic relations suggests that practice only the organisation before an untoward Communication and Theatre comes into play once damage is already Arts Department at Old Do- event happens and, when a crisis emerg- happening. However, one of the leading minion University in Norfolk, es, engaging in further discussion with scholars in public relations and crisis Virginia, USA. He is co-author them about ways to ethically resolve the management, Timothy Coombs, has said with Yvette Pearson of the crisis. From an ethical perspective, the that crisis management is about planning book Crisis Communication and public relations person, at a minimum, actions that are focused on forestalling Crisis Management: Principles should be surfacing in these discussions a crisis, or, failing that, minimising the of Ethical Practice, slated for matters of fairness, respect for individu- harm from the crisis. Other scholars simi- release by SAGE in 2016. al autonomy, steps to minimise further larly offer that public relations within cri- harms and making decisions based on sis management is a process of constantly recognition of power imbalances (e.g. who surveying for potential problems in the has more resources to act in handling the organisation’s internal and external en- crisis, and who is relatively powerless?). vironments, assisting in formulating the Rather than pure self-interest (e.g., “how organisation’s plans for avoiding crisis will this crisis affect us on the stock mar- and, if the crisis occurs, leading the or- “Ethics is not an ket”) the public relations person in a cri- ganisation successfully through the crisis add-on to help the sis scenario, as he/she would in multiple and into learning and renewal. other situations, serves best by arguing That’s quite a different understand- client manage the that all decision makers in the organi- ing of public relations than, for example, sation have a role to play in discerning revealed in US television show Scandal’s crisis situation.” constructive, ethical measures. Along the multiple manipulations in reacting to way, the public relations person stresses crisis, or how journalists talk about per- ethical management of the crisis by advo- sonalities like Chris Brown or Donald cating that management make decisions Trump using public relations to attempt on next steps to take based on solid ev- to rehabilitate their damaged images. In- can be readily looked up in a code of idence about how the crisis is affecting stead, we need to understand that public ethics or readily found in a set of policies stakeholders. relations’ more vital role in crisis manage- or procedures such as business manu- These approaches display that the ment is helping to prevent injury to both als or a crisis management plan. While public relations person assisting in crisis the client and its publics, or failing that, both codes and policies/procedures can management knows something that spin helping both to successfully emerge from be informative, in a burgeoning crisis sit- doesn’t acknowledge: that, more often the crisis with their needs met. uation they almost certainly will prove than not, stakeholders define the extent to be insufficient. Instead, the public re- and complexity of a crisis, not the organ- Building lations person will need to focus on the isational actor that must manage the cri- needs, values and considerations of both sis. When the public relations profession- relationships the management group and the stake- al helps the client manage the situation holders affected. This does not come from this ethically sound perspective, the With this understanding comes the from memorising code prohibitions or client is better equipped to move past self following: ethics is not an add-on to help fingering through crisis planning charts. interest toward a sound resolution for the the client manage the crisis situation. As It comes from building relationships with multiple parties caught up in the intricate s: www.thinkstock.com; Private www.thinkstock.com; s: Photo a crisis unfolds, it is not something that key representatives inside and outside dynamics of crisis in today’s world. •

communication director 4/2015 49 CONTENT MARKETING

The real world of storytelling

Content marketing is king – we read and hear this a lot. But what does the reign of this new marketing royal look like? What are the key success factors and what are the major problems? How do agencies, companies and journalists work together?

By Alexander Gutzmer

only strategically relevant, but also highly creative and original, as well as creatively and originally communicated. The generation and implementation of unique, fascinating and strategically suitable stories is a key success factor in modern marketing strategies. How this T generation and implementation works, he world of branding is in turmoil. Ad- however, is something no one seems to vertising is losing the strategic relevance be quite sure about. Of course, there are it once had. Content marketing and agencies that declare they specialise in storytelling are seen as the new keys just this. However, they often try to prove to branding success. There seems to be their own strategic and creative superi- consensus that journalistic stories about ority by simply asserting multimedia ex- a brand have the potential to create a pertise, the core argument being: we use more substantial connection between all channels. We know digital. Therefore customer and company than your aver- we are strategic and creative leaders. As age 30-second television spot. That is, as if “digital” was in itself a strategically-rel- long as the stories that are told are not evant story.

50 communication director 4/2015 CONTENT MARKETING

One key finding: the majority of companies today accept that storytelling is an integral element in successful communication strategies. Two thirds of the tive” and one “not effective at all”, they all agency managers that took part in the think that storytelling realises cognitive, survey acknowledged that their custom- affective, conative and social targets. ers perceive storytelling as a strategic tool, Not surprisingly, agency managers while one third see it only as a tactical are overall more optimistic than journal- instrument used on an irregular basis. ists or corporate marketers. Their aver- Corporate clients who think that content ages range from 3.7 (cognitive targets) up marketing and communication strategy to 4.5 (affective targets). The range of the don’t belong together do not seem to exist marketers spans from 3.2 (conative tar- at all. gets) up to 4.2 (affective targets), the jour- So if storytelling is used on a broad nalists’ range from 3.7 (cognitive targets) basis, then the next question is: how ef- to 4.2 (both affective and conative targets). fective is it as a tool for communication? The positive attitude of the agencies is of We also have to ask what its particular course a professional bias: they have to be strengths are – assuming that not all convinced of the services they offer. targets are equally attainable through However, the results are interesting storytelling. on at least two other accounts. First of all, when we compare the individual target Targeted categories, we see that journalists rate The key question, then, is: how stra- the conative components of storytell- tegic is content marketing really? What storytelling ing higher than marketers. Apparently, can journalistic storytelling achieve in companies are highly sensitive regarding marketing or communication terms? In her book Unternehmenskommu- the difficulty of really making customers How advanced are companies in using nikation (“Corporate Communication”, do something. (The most relevant action storytelling in a strategic way? How do published by UTB Stuttgart in 2010), companies strive to make customers en- the different players – companies, agen- public relations professor Claudia Mast gage in is, of course, the eventual pur- cies, journalists – perceive each other? distinguishes four key categories of pos- chasing act.) And how do they work together? In short: sible communication targets: cognitive, What is also interesting is that the what are the rules, and who rules, in the affective, conative and social targets. The journalists see the effectiveness of their cool new world of content marketing? first three targets refer to basic brain own writing at a lower level than their functions, and are regularly dealt with in typical contractors, the agencies, do. This A question neuroscientific approaches. The cognitive might be because a certain scepticism part of the brain measures intelligence, is part of the journalism profession. It of research while the affective part deals primarily might, however, also result from a lack with emotions, understood here in the of involvement of the journalists when it It is questions like these that I asked broadest sense. Conative refers to the way comes to measuring success of a content in research conducted together with the in which the brain drives how one acts marketing project. Perhaps they simply German content marketing institution on those thoughts and feelings, thereby do not get to see the results of their work. Forum Corporate Publishing. We inter- connecting inner and outer world. Social When we take all three groups togeth- viewed decision makers in brand com- targets, finally, are about how communi- er, it becomes clear that the significant panies and agencies, as well as freelance cation impacts our relations in an inter- strength of storytelling lies in its emo- journalists regularly involved in content personal context. tional capacity. All three groups give high- marketing. The picture that can be drawn When I asked which of these targets est values to the ability of storytelling to from the results indicates that by no can be reached most effectively through generate powerful emotions. Good stories means do all involved players agree on storytelling, the professional storytellers create sentiments and images, catering how smart content marketing, one that from agencies, companies and journal- to our longing for emotions. Storytell- uses the full intellectual and emotional ism agreed that storytelling helps in all ing, therefore, is at its strongest when it potential of journalistic storytelling, re- four target segments. On a scale from emotionalises rational messages or dull

www.thinkstock.com Photo: ally works. one to five, with five meaning “very effec- positions.

communication director 4/2015 51 CONTENT MARKETING

Obstacles to marketing, whether corporate magazine success or online and social media tools, are generally accepted. It also shows a general And yet, by no means are all story- optimism as to whether different target telling or content marketing campaigns groups can be reached with a suitable equally successful. In order to under- content marketing medium. stand what makes a campaign effective, When we look at companies, the sec- I relied on a theoretical frame offered ond biggest obstacle is the alignment of by management thinkers John Marshall a storytelling strategy with the compa- and Matthew Adamic. In their article ny, its values and historical background. “The story is the message: shaping cor- “What we see is Once more, the marketers are distinctly porate culture”, published by the Journal that all decision less optimistic here (average of 3.0) than of Business Strategy in 2012, they differ- journalists (3.3) and agency managers entiate between four necessities for any makers find that (3.7). This shows that concrete stories of- strategically developed story to reach ten don’t fit as well as those inventing and mobilise its audience: a) purpose, b) the biggest obstacle them seem to think. Corporate media allusion, c) people, and d) appeal. Their to successful creatives, therefore, are advised to spend reasoning is that in order to be success- more time in researching the company in ful, strategic corporate narratives have to storytelling is a question in order to develop stories that be told with a clear, strategically defined really match its corporate background communication target in mind (purpose), lack of strategic and culture. Good storytelling starts with have to relate to a company’s history and purpose.” finding the right corporate soil in which its shared values (allusion), have to be to seed a new story. told by a person and through a medium that the audience respects (people), and Tell me what should contain an emotional attractive- ness (appeal). I asked my interviewees you really how difficult it is for each of these condi- think…. tions to be reached within a storytelling initiative, with an answer range from one However, successful storytelling not (very difficult) to five (not difficult). only needs carefully planned and real- What we see is that all decision mak- ised stories. It also depends on the dif- ers find that the biggest obstacle to suc- ferent actors involved. That’s why, in my cessful storytelling is a lack of strategic research, I also asked how agencies, jour- purpose. Marketers have the lowest aver- nalists and marketers see each other. The age here (2.6), followed by the journalists Alexander Gutzmer results are not always flattering to the (3.3) and agencies (3.5). Certainly, this has Quadriga University, Berlin different target groups. to do with the higher sensitivity of mar- When we look at what marketers keters to the strategic fit of a corporate Dr Alexander Gutzmer is think of agencies, then their biggest prob- storytelling initiative with the company’s professor for media culture and lem does not seem to be a lack of strategic overall strategy. It indicates that storytell- communication at Berlin-based understanding or multimedia compe- ers still have a lot of explaining to do. We Quadriga University. He is also tence. It is creativity. When I asked the needn’t assume that storytelling is not editor-in-chief of the archi- company managers whether the different tecture magazine Baumeister, strategic per se, but it does not always fields of expertise present problems when and editorial director at the succeed in explaining internally as well as cooperating with agencies, and offered Munich-based publishing externally the way in which it contributes them a scale from one (permanent prob- house Callwey. to a company’s strategic goals. lem) to five (never a problem), then the Interestingly, all three groups agree measure showed that creativity was more that the personal fit of storytelling for of a problem (2.4) than strategic under- readers and for the testimonials in the standing (3.3) or lacking multimedia com- stories is the smallest problem. This indi- petence (3.0). Also, agencies are not seen cates that the media platforms of content as overly stubborn or as too much in love

52 communication director 4/2015 CONTENT MARKETING

with their own content ideas (3.2). Neither is their acceptance within the company much of a problem (3.8). No, it seems to be that the resource that agencies mostly lack is brilliant ideas. Regarding the attitudes of agencies, Executive Summary we find that the most pressing difficulty for agencies when collaborating with • Despite the ubiquity of companies is the latter’s perceived lack content marketing, not all of creativity or of courage to realise cre- the confines of the company, are not yet players agree on how suc- ative solutions. This might not come as a cessful content marketing universally understood. A lot of internal surprise. What is more surprising is the really works. explanation work seems still to be nec- low score when it comes to companies’ essary. perceived strategic understanding (2.8). • But journalist, agencies and When we cast a final look at jour- When we compare this to the 3.3 average corporates are agreed the nalists’ attitudes, we encounter a certain companies gave to the agencies, then we strength of storytelling lies scepticism regarding their own strategic see that the company representatives I in its emotional capacity. involvement. Some feel that companies interviewed see agencies as more strate- do not value their strategic competence gically capable than the agencies see their • Obstacles to successful enough (average of 2.8). When we com- clients. And, what is more, agencies even content marketing include pare this to the attitude of companies see the journalists they collaborate with a lack of strategic purpose towards journalists, we see that compa- as more strategically competent than the and an inability to make a nies give a higher rating to the strate- story fit the corporation’s companies (3.0). Does the tail wag the dog gic competence of journalists than the history and values. here? Or can we assume that agencies journalists themselves believe they de- have by now built such a strategic capac- serve. More self-confidence seems to be • Journalists are advised to ity that they really know more about a advisable here for journalists. And even enter the content marketing company’s strategic requirements than process with self-confidence more so as in their practical work, their corporate decision makers themselves? and a strategic perspective. role is no longer that of mere producers This question cannot be answered in this of clearly-defined stories. The majority article. • Furthermore, without the of journalists involved in content mar- When we finally pay a closer look to successful integration of keting have the role of creative drivers the perception of journalists, then the re- fundamental ethics and or of strategic sparring partners. This is sults show that journalists are no longer concepts form the world of a good sign. It shows that in the complex the odd ones out in the big game of con- journalism, content-orient- creation process of content marketing tent marketing. In particular, agencies see ed changes in the communi- solutions, those journalists active in the them in a rather positive light. The aver- cation approaches of brands field seem to have finally found their role. age in terms of their strategic capacity is will remain elusive. In sum, what we see is that the de- a slightly reassuring 3.0. Journalists are velopment of suitable content marketing also seen as competent in terms of mul- strategies and the execution of content timedia (3.3), and as creative (3.8). marketing programmes that create last- Companies see journalists slightly ing competitive advantages is a highly more sceptically. The biggest problem complex process, the basic mechanisms they find in journalists is not a lack of of which are not yet clearly defined and strategic competence (3.0), nor of miss- understood by all participants. There are ing creativity (2.8, which is, however, a a number of different players involved, disappointing value); the biggest prob- and their respective roles have yet to be lem companies have with journalists is clarified. The integration of journalistic the company’s own lack of acceptance of ethics and concepts into the world of journalists (2.5). Apparently, within the content marketing is a demanding, yet companies, the mechanisms of storytell- highly important goal if we are to see ing, which necessarily include external real, content-oriented changes in the way

Photo: Private Photo: journalists researching stories within companies and brands communicate. •

communication director 4/2015 53 Investor Relations

Will the real IR officer please stand up?

In recent years, investor relations has become a force to be reckoned with. However, studies show that there is no agreed job description for this function. So how do today’s investor relations and capital market professionals see the function’s role?

By Kristin Köhler

ver the last 30 years investor relations for investor relations to establish itself as has developed in leaps and bounds. The a management practice and structural concept of investor relations was first in- element in US companies. If we take a troduced in1953 by Ralph J. Cordiner, then look at Europe we see that the spread of chairman of the board General Electric. investor relations management practice Cordiner used it to describe communica- in capital market-oriented companies tions with the retail shareholders of his took shape at the earliest in the 1980s, and listed company. He set up an indepen- more frequently in the 1990s. Companies dent functional unit for it and, in retro- in the UK were active somewhat earlier spect, his approach shaped not only the than continental companies due to their concept but also the practice of financial cultural affinity to their big brother, the communication. Yet it took over 30 years USA.

54 communication director 4/2015 Investor Relations

In the meantime the professionali- Club are popping up in the profession. relations association in the world, counts sation of investor relations in terms of From zero to 100 in only 30 years – so is 3,300 members representing over 1,600 communication with the so-called finan- everything fine in the world of investor companies. What is not clear is the ques- cial community has rapidly advanced. relations? tion whether investor relations is related It begs the question: why did investor Not yet. Yes, a profession has devel- to a department or distinct job position relations as a function and as a profes- oped. But investor relations is still a mi- within a company, or is it a function that sion only begin to establish itself in the cro-profession with approximately 1,500 could be executed by the communica- second half of the 20th century? Joint members in Germany. In other European tions department, or by finance and so stock companies have existed since the countries except the UK, the numbers on. Although investor relations is closely 15th century and so, too, shareholders as are far less. And even in the USA where connected to the company’s equity fi- stakeholders in companies. A research it all started, investor relations is mostly nancing, the job of an investor relations project carried out at the University of limited to publicly held companies. How- officer is also found in non-listed com- Leipzig explored how financial commu- ever, the National Investor Relations In- panies that need, for example, to issue nications became institutionalised as stitute, the largest professional investor bonds. More far-reaching than the ques- a management practice in Germany. It tion of growing the presence of investor surveyed a total of 80 investor relations relations is the understanding of what managers in corporate enterprises, buy the profession actually does. We only und sell side representatives, ratings the five Types of speak of establishing a profession once it agencies, financial journalists, interest Investor Relations is no longer just an area of specific tasks groups representatives, finance experts, and activities, but also has a standard job regulators and legal consultants, as well 1. Information disclo- description, a proper admission process as scientific representatives. Its findings sure: viewed exclusively and a specific professional culture. In the can act as a best case study for European as fulfilling regulatory case of investor relations, this remains investor relations professionals wanting requirements. Guidelines debatable. to gain a better understanding of this are provided by legislation fascinating field. and regulatory authorities, such as stock exchanges Investor relations times five and other standard-setters. German companies Financial communication A standard profile for the profession is reactive and follows as best practice? is still an illusion. There are not one, but minimum requirements. An five different kinds of investor relations: independent IR function in BASF, Bayer, Daimler, Nixdorf, Sie- the kind that fulfills the regulatory duty the company or a specific mens, Schering and VW are just some to provide information; as a communi- IR profession does not exist of the German companies that created with this type of financial cation, marketing, or finance function; an investor relations position back in communication. and finally as an integrated function. The the 1980s. But a real breakthrough came different functions reflect the way the only in the mid-1990s with the increased 2. C ommunications professionals view themselves and how importance of the capital markets. From function: viewed as part they are perceived by the various capital that moment, investor relations profes- of corporate communica- market players, as well as reflect the role sionalised incredibly quickly. This not tions that handles relation- that investor relations plays within the only relates to its spread within German ships with the financial company and in the market (see The Five companies or the founding and establish- community and diverse Types of Investor Relations). ing of the German investor relations asso- stakeholders. The goal is to develop long-term rela- ciation DIRK e.V. as a professional body: Famous adversaries: investor relations “made in Germany” is tionships with all relevant capital market players and viewed internationally as best practice, communication vs. finance ensure a one-voice policy rewarded with numerous awards and within the company. The IR accolades. There are opportunities for “Some say investor relations is a bullet manager serves mainly as further education for investor relations point of communications. Others say that the company’s ambassador managers, regular conferences, relevant in the capital market. it really belongs in strategy or accounting. publications and scientific research proj- I think for an external impact it is very,

Picture: www.thinkstock.com ects. Professional networks like the IR very important to have a one-voice policy

communication director 4/2015 55 Investor Relations

and that it should be managed from a internal dimension. ”You already see central point in the company” (head of examples where investor relations is not investor relations, at a DAX-listed com- only a communicator but is also a strategic pany). The investor relations manager is and financial advisor to the management viewed along the lines of a communica- board (buy side representative). Investor tion function, in particular as the com- relations is perceived as an appropriate pany’s ambassador in the capital market. point of contact for various capital mar- Kristin Köhler This is different from the type of investor ket players. “I don’t see investor relations Chief Executive Officer relations run by the finance function:“We as the long arm of the chief financial of- Center for Corporate Reporting are not communicators, we are financial ficer pushing around numbers... I also do experts” (head of investor relations at corporate communications... business de- Dr Kristin Köhler is chief exec- a DAX-listed company). Here investor velopment... strategy... You can only cov- utive officer of the Center for relations performs support services for Corporate Reporting in Zürich, er management’s back when you can do the finance function in a company. The Switzerland. Previously she more than twist numbers or sing the profit investor relations manager has the pri- was a researcher at the Chair and loss song” (head of investor relations mary role of providing information and for Strategic Communication at a DAX-listed company). Investor re- explaining the numbers. Investor rela- at the University of Leipzig and lations lends significant support to the tions in Germany is usually not a subset project leader of the Academic financing of a company and is therefore of corporate communications but is an Society for Corporate Man- directly involved in creating value. Be- independent function, or reports directly agement and Communication, sides being a decidedly external function into finance. There are, of course, over- Leipzig. investor relations is becoming more and laps in tasks, such as the organisation more of a strategic unit. That means that of the annual general meeting, produc- it is increasingly brought in as a stra- tion of reports, calibration of messages tegic advisor with knowledge of capital for financial journalists, or the design of expectations as well as familiarity with 3. Marketing function: the website and other digital channels. the industry and the positioning of com- The goal is to maximise the However, there are also companies where share price and create a petitors. He or she understands the up- investor relations is seen as a superordi- positive image of the com- shot of talks with sell and buy side and nate of communications and is settled pany. The capital market enables all of this knowledge to flow into there within the organisational structure. and its players are the pri- a strategic dialogue within the company. A one-voice policy for all stakeholders mary focus, with marketing Investor relations also has an educational is important and investor relations is activities focusing mainly function: it acquaints operational busi- viewed as a communication function on the retail investor. High ness units with how the capital markets responsible for the capital market play- profile and image should work and what the demands of share- ers. In smaller capital-market oriented also boost other areas holders are as owners of the company. companies the relegation of investor rela- such as product marketing, Employees can also share in the success tions to the communication department employee recruitment and of the company through special employ- is often made because there are simply public perception. From a ee share programmes – and at the same comprehensive marketing no resources for broad relationship man- time become aware of the financial and understanding (investor re- agement with investors. capital market topics that are essential to lations as salesman) there develop the company. is a distinction between IR plus: the integrated marketing the equity story function and using marketing tech- Who am I? niques when approaching investors. In addition, Investor relations is an independent investor relations is viewed Of course the various types are not unit within a company that is in sync as a function to serve the clearly delineated. They correspond to with the finance and communications company’s customers in both the current and the historical char- functions as well as with strategy, merg- the capital market. acteristics of investor relations. Against ers and acquisitions, corporate govern- this backdrop it is difficult to speak about ance, sustainability and corporate devel- a standard investor relations profession,

opment fucntions. It also has a distinct even though we know that investor rela- Private Photo:

56 communication director 4/2015 Investor Relations

communication director 4/2015 57 Investor Relations

tions is well-established in (listed) companies of a certain size, no matter what the 4. Finance function: type. Investor relations usually reports perceived as a support for directly to the chief financial officer or the finance function and chief executive officer; that is to say, it is contributes to refinanc- settled high up in the organisation. There ing, raising capital and are distinctions based on size of company, securing the availability tions varies – and with it its organisation- capital market affinity, the shareholder of financial means for al positioning and the role of the investor structure and capital market experience. investment needs. An relations manager in the company and When you talk to analysts or investors information balance in the capital market – the alignment you often hear that the management between the company and with key players can be seen as institu- board is viewed as the “highest investor its (potential) shareholders tionalised. relations officer”. This is not surprising can be developed through investor relations activ- because when steering the company …and company interests through important investment decisions ities thereby optimising they want to be a force to be reckoned capital costs. At the heart with. The more investor relations is in- is the trade-off between Besides the influence of the capital cluded in strategic decisions or even in shareholder demands and markets, usually company-specific fac- cost-benefit for the com- the broader executive management (usu- tors are most relevant. Despite outside pany. Investor relations ally in connection with departments like pressures, companies have the possibil- managers assume the role mergers and acquisitions, strategy, cor- ity to react individually within the in- of supplying information porate governance or corporate develop- stitutional setting. They can use diverse and providing insights on ment) and have direct access to the chief the numbers. mechanisms or strategies such as ges- executive officer, the stronger their stand- ture politics, exploitation, imitation or ing becomes within the organisation, 5. integrated function: negotiation. The type of investor relations and consequently in the capital market. viewed as an integrated found in a company depends on the kind However, in practice it functions along function that sets the of company itself. The executive board the lines of the already mentioned types, capital market orientation plays a key role. It doesn’t make sense often in the role of information provider of the company. It is an for all companies to pursue strategic in- or voice of the management board. independent functional vestor relations as the cost-benefit may unit within the company not be reasonable (e.g. for bond issuers) as well as a specific The impact of capital or may not be welcome by the board. profession that links up With increasing professionalisation, in- markets… the finance and communi- vestor relations officers can shape their cation functions as well as own areas of responsibility and take on a strategy, M&A, corporate The five types of investor relations strategic role. The types mentioned here governance, sustainability mentioned here are influenced by the can be a set of tools for communicators and corporate develop- specific composition of the capital market that span the breadth of the investor rela- ment. It has a distinct as well as internal factors within the com- internal dimension. Based tions practice. Investor relations officers pany. Theorists identify the key players on its strategic function can then position themselves accordingly as being the buy and sell side, banks, cor- and its role as consultant within the organisation. They can iden- porate finance advisors, stock exchanges to executive management tify development potential and various and trade organisations. Legislation has and other (operational) role profiles emerge that can be used by historically imposed increasing regula- corporate units, investor communications managers for a proac- tory requirements, thereby shaping the relations is perceived as tive shaping of investor relations within capital markets. In retrospect however, an appropriate first port the company, and for career planning. • investor relations was primarily intro- of call for the diverse duced due to normative pressure. Com- capital market players. In panies orient themselves according to addition, it represents the industry peers, union activities and the shareholders and acts as a go-between investors and demands of analysts and investors. Even management in clarifying when the understanding of investor rela- interests.

58 communication director 4/2015 ONLI NE EDUCATION

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communication director 4/2015 59 en.quadriga.eu/online-education interview

“Suddenly people realise that they can’t afford to ignore citizenship and responsibility.”

Throughout her career, Gabriele Zedlmayer has been a passionate advocate for corporate citizenship and sustainability, most recently as vice president and chief progress officer, corporate affairs at Hewlett Packard Enterprises. She spoke to Communication Director about her work, Living Progress and the business case for citizenship.

interview By dafydd PhilLips

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ou joined Hewlett Packard in 1987. How have you seen its approach to corporate citizenship grow? I’ve seen the company move through many Y different phases, but corporate citizenship has been embedded into the organisation since the beginning. It was originally woven into the corporate objectives in 1957 and is now intertwined into our business model as the way we operate. We call our approach to citizenship Living Progress, which is how we unite people, ideas and technology to solve the world’s toughest challenges. Over the years I believe that Hewlett Packard has been on the cutting edge with its approach to citizenship and has led the way for the IT sector.

What in your opinion are the ingredients that make for a good corporate citizen? As Dave Packard said in 1947, “The betterment of society is not a job to be left to a few. It’s a responsibility to be shared by all.” As a company, we have been steadfast in our commitment to conduct our business in a way that also contributes to the betterment of society. We believe companies can address societal challenges in ways that benefit their company while also delivering wider human, economic and environmental value.

In an earlier interview, you said people sometimes mistake citizenship for compliance. Where does compliance end and citizenship begin? We believe sustainability and citizenship aren’t just things to comply with regulations, indices or to mitigate risks. While compliance is essential, it’s not going to enable the progress we must make as a society to drive a low-carbon economy. Sus- tainability and citizenship must be integrated into a company’s business strategy. In that way, it becomes grounded as a way that improves your business and the world around you.

Why should companies feel that it is incumbent on them to step up to the role of pushing for human and economic progress? There are big challenges facing our world, including a rapidly growing population, effects of climate change, economic instability and global health crises, just to name a few. These challenges are interconnected, affecting society and business. We must work to address these challenges holistically. For ex- Gabriele speaking at the 2015 European ample, by advancing the health and well-being of people, they Communication Summit in Brussels are better able to participate in the global economy. When we protect the vital resources of our planet, we improve the well-be-

ing of people. Nimke Julia Photo:

communication director 4/2015 61 interview

What’s the role of a communications leader in helping deliver our products and services, and extends to responsible companies become better global citizens? sourcing of minerals at the very beginning of our supply chain. There’s an exceptional opportunity for leaders and com- They also lead to higher-quality products a nd help ensure the municators to bring clarity to complex issues, to make the continuity of our supply lines. We have also expanded the reach connection to purpose and to inspire action. We live in a time of of our programme to many nonproduction suppliers. Through endless disruptions, so communicators have a big job to break our 14-year history of working on supplier responsibility, we have through all the clutter and chaos and put meaning and purpose refined systems for collecting and analysing information from in the heart of their communications. And, don’t forget about many sources to identify new and emerging risks. For example, transparency – it’s important to be authentic and to face your Hewlett Packard was the first IT company to introduce guidance communication challenges head on. for the treatment of student and dispatch workers and the first to require direct employment of foreign migrant workers in our What have you learned from collaborations through- supply chain through the Hewlett Packard Foreign Migrant out your career with NGOs such as Conservation Inter- Worker Standard. In addition, we build the capabilities of our national? suppliers by focusing on workers, invest- The strength of partnerships is abso- ing in their development and empowering lutely vital if you want to be successful; them to be involved in improving supply no one person or organisation can do it chain responsibility at their sites. alone. We’ve learned that it’s important, in fact imperative, to be clear on all as- Are western companies doing pects of your engagement - the timelines, “ Sustainability and enough to ensure their supply chains deliverables, reviews, approvals, who the are better integrated with local com- stakeholders are and so on. It’s also im- citizenship must be munities? portant that you don’t concentrate on integrated into a We work with our partner factories to metrics for metrics sake but rather deter- participate in a number of positive, com- mine what is most meaningful and focus company’s business munity based efforts, often launched by on measuring that. organisations, such as BSR, and industry strategy. In that leading companies such as Disney and NGOs can occupy positions that way, it becomes Walmart. Examples include HERProject, are critical of corporations. What ad- which is focused on women’s health and vice would you give to ensure a good grounded as a way education; HERFinance, which is focused working relationship with NGOs? on financial inclusion; Women in Facto- As I’ve mentioned, transparency is that improves your ries, which works on increasing women’s absolutely critical. It’s important to seek business and the economic mobility; and migrant parent the dialogue, talk with them and work on training, which is focused on improving solutions where they can see themselves world around you.” and maintaining relationships between embedded in the overall solution. Trou- migrant workers and their children. Not ble shows up when you shy away from only do these programmes positively im- or try to ignore criticism. And as we’ve pact workers in factories, but also the discussed with our partnership with Con- communities in which they live. Our servation International, being clear about analysis also demonstrates that factories expectations from the outset will help set that participate in these programmes you both up for success. yield higher overall auditing scores, which helps reinforce the link between responsible practices and good business. I was especially struck reading about Hewlett Pack- ard’s Go West strategy in your supply chain: for example, Alongside your responsibilities at Hewlett Packard moving supply centre from eastern to western China Enterprise, you’ve also engaged with social matters in when you found that most workers had families in the positions outside the company. How do you recommend west. Can you tell us a little more about the importance socially-minded senior corporate professionals like your- of supply chain responsibility? self to seek out these kinds of extracurricular commit- Our Supply Chain Responsibility programme was founded ments? in 2001 and is fundamental to HPE Living Progress. Our supply It takes expertise and commitment if you want to be an chain standards enhance the lives of people who make and effective contributor and you need to be passionate about what

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the organisation is trying to achieve. The time commitment is important. If you want to be an effective board member, you need to engage beyond attending Gabriele Zedlmayer “I believe without board meetings. With JA I’m part of a subcommittee that works to ensure we Gabriele Zedlmayer drives that diversity too have the right mix and expertise on the HPE’s Living Progress initiatives that help improve the board itself. JA has an important char- many filters get lost communities we serve aligned ter to inspire young people to succeed in with HPE’s business strategy. and we don’t tackle today’s economy and they do such great She leads a global team of ex- work. It’s absolutely time well spent. It’s the tough issues perts focused on solving social critical for young people to be exposed to and environmental issues in businesses are programmes of that nature. In addition collaboration with non-profit to JA, I serve on several other boards in- organisations, governments, faced with today.” cluding, the board of directors of Hewl- customers and partners. Her ett-Packard Germany, member of the EU goal is to create solutions that Commission e-skills leadership board improve communities and and the Computer Science Advisory advance human, economic Board of the University of People. and environmental progress. Gabriele serves as a member Looking back on your career, You are also president of the Fe- of the board of directors of what have been the major changes male Customer Advisory Council at Hewlett-Packard GmbH Ger- in the field of corporate citizenship Hypovereinsbank Unicredit, which many. She is president of the and responsibility during your pro- Women’s Council of HypoV- helps promote socio-political and fessional life? ereinsbank Unicredit and a financial discourse at the Bank. To One of the major changes is that over member of the EU Commission what extent is the development of time companies have come to under- e-skills leadership board, the women’s presence in the corporate stand that business can come to a halt for Computer Science Advisory landscape an important part of cor- Board of the University of non-compliance. It also becomes an em- porate citizenship as a whole? People and Junior Achievement ployee engagement and corporate brand- Part of good corporate strategy is Europe, Middle East and Africa ing issue. But even more than compliance, being a good corporate citizen. And I (EMEA), the World Economic as we talked earlier, there’s another shift believe more women need to be in the Forum’s Council on Social In- happening – and that’s that companies management and leadership roles of or- novation and the Corporate Ad- are realising there’s a business case for ganisations. Fundamentally, women and visory Group of the We Mean citizenship that applies to both the public men think differently, make decisions dif- Business Coalition. In 2011 she and private sector. In fact, the US govern- ferently, consider differently. The world was honoured by Newsweek ment is on the cutting edge with their sus- needs a balanced view that can only be and the Daily Beast as one of tainable procurement methodology - you achieved with women in decision-making 150 Women who Shake the can run various products through their positions. Otherwise it gets too one sided. World. In 2012 she was named methodology to determine the total cost by FastCompany as a member And I’d also say that diversity is broader of ownership. Our Moonshot server was of the League of Extraordinary than just the focus of more women need- recently put through this methodology to Women and was awarded with ed in the mix. A very recent example of evaluate the externalities with sustain- the DLDWomen Impact Award. our commitment to diversity is exem- ability and incorporating those into the plified in how we created the two new cost decisions. The results were incredible boards for HP Inc. and Hewlett Packard – conservative estimates show using the Enterprise. We set out to find the most experienced, global-mind- HPE Moonshot server, the “estimated” savings of four per cent ed and diverse members to help each company win in their would mean taking six million cars off the road for one year, or particular markets. Those boards truly reflect the market place, the equivalent of eight coal plants operating for one year. Sud- and I believe without that diversity too many filters get lost and denly people realise that they can’t afford to ignore citizenship

Private Photo: we don’t tackle the tough issues businesses are faced with today. and responsibility. •

communication director 4/2015 63 issue focus

64 communication director 4/2015 issue focus

Issue Focus

Hidden powers

66 82 Turning values Collaborate and into value empower How to align social mission Corproate social responsibility with your products and create goes more than skin deep – it positive change for the world 74 can change public policy By Rob Michalak Setting standards By Aykan Gulten for progress

Integrity, innovation and ethics can ensure your social license 70 86 to operate The unwritten cont- By Roma Balwani Changing the ract in corporate rules governance Demanding corporations Showing trust in employees adhere to responsible conduct brings unexpected benefits 78 is the responsibilty of citizen By David F. Larcker and stakeholders Brian Tayan The evolution of By Malcolm Mcintosh corporate reporting

A new approach to reporting corporate sustainability By Carol A Adams

communication director 4/2015 65 Issue Focus Turning values into value

Ben & Jerry’s looks to achieve innovative ways that the business can use its many resources to create positive social change in the world.

By Rob Michalak

ur co-founder, Ben, would often say, “Why leave your values at the door when you go to work?” O Good point. Since business is arguably the most powerful force for change in the world, a good value system seems to be a sage idea. Good for the world and good for business. Our research tells us that our Ben & Jerry’s fans, who know and understand our values-led business model, are more than twice as loyal as those that don’t know about it. We also understand that the millennial generation favours authentic, purpose-driven businesses and are twice as loyal to us as they are to other companies. We want a progressive set of values to drive our business and the decisions we

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make on a daily basis. We want our busi- Jerry’s was the first wholly-owned subsid- ness model to create progressive change iary in the world, with full support from throughout our value chain. We know our parent company, Unilever, to gain that people have deeper, more loyal con- “Our co-founder, B Corp certification. B Corps are a new nections to businesses that have shared type of corporation that uses the power of values. They will stick with those compa- Ben, would often business to solve social and environmen- nies longer, through good and bad times, say, ‘Why leave tal problems. It is growing exponentially helping to smooth out any rough patches with certified B Corps joining the move- along the way. We’ve seen that during the your values at the ment around the world. dramatic moments in the global econo- Today, we continued to explore what my over the past decade. door when you a sustainable corporate concept of linked When we consider the current global go to work?’ prosperity means, in all its forms. But we trends – climate change, wealth consoli- are not just exploring a theory; we are dation, political unrest and migration – Good point.” finding practical ways throughout our we need to work from a solid set of values value chain to implement business deci- to move in a positive direction. From the sions that manifest our best aspirations. very beginning, we’ve understood that Inside and outside of Ben & Jerry’s, we business must be much more than the That vision is captured in the pream- challenge ourselves to keep developing financial bottom line; that values lead to ble of our three-part mission statement, and implementing new ways that linked value. Businesses are a part of the com- that we are, “dedicated to a sustainable prosperity can create more positive out- munity and must be engaged within the corporate concept of linked prosperity.” comes by the way we choose to do busi- community to create positive change. We We’ve been working on what “linked ness. aspire to be a company that, in the face of prosperity” means ever since. The idea We recently went through a compre- climate change and growing social ineq- is as simple as it is radical: as the com- hensive process of mapping out our five uities, takes responsibility for our part in pany prospers, all those touched by the year vision for what we want to accom- creating solutions to the issues that face company must also prosper, including plish, which sets a direction that will car- us all such as reducing our own carbon employees, suppliers, customers, and ry us well beyond 2020. We came to the footprint, addressing the unjust conse- communities. A simple idea, but it takes understanding that we need to deeply quences of climate change throughout a lot of work by a lot of people to make focus Ben & Jerry’s on two overarching our value chain and helping to reshape it happen. priorities: climate justice and social eq- public discourse around the issues of eq- You could think of linked prosperity uity. The two intersect in profound ways. uity, race and class. We aim to contribute when considering how it benefits people The work that we do as an agricultural- to a renewed political landscape in which through some of our more well-known ly-based business, sourcing ingredients fundamental policy change to address examples: our livable wage policy; on- from the global north and south, selling root-causes of inequality is possible and going support for family dairy farms, ice cream around the world, compels us to achieved. supporting small-holder agricultural address climate justice and social equity In 1978, when we first opened our producers by purchasing Fairtrade-certi- and deliver some significant results. doors as an ice cream parlour in Burling- fied ingredients and values-led sourcing ton, Vermont, we wanted to be an active, partnerships such as with the Greyston Globalisation engaged part of the community. By 1988, Bakery in Yonkers, New York, where they when we were 10 years old, our business hire people with barriers to employment was growing and so was the community and empower them with skills training, a When you take an honest look at in which we did business. And the way renewed sense of dignity and a paycheck the global economy of the twenty-first we wanted to conduct our business had at the end of the week. Or you could think century, what is often referred to as a evolved into something more. By then, we of linked prosperity as benefitting the ‘free market’ is no such thing. In the last realised that we needed to write down our planet we share by supporting sustaina- few decades, it has been warped through conviction that business could be a posi- ble forms of agriculture. No matter how national policies and trade agreements tive force for change. And so, in 1988, we you think about it, it’s all linked. into a system that benefits the few at the created one of the first corporate mission A quarter-century after pioneering expense of the many. The result is that statements that included a social mis- socially responsible business practices, the disparity of wealth in the world is sion alongside the economic and product we were excited to join the B Corp (Bene- now greater than at any time in human missions. fit Corporation) movement in 2012. Ben & history, with those at the top living lives

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What does it mean?

Our company is a participant in both the global economy and the industrial of luxury and outrageous excess while food system. So, to tweak an old saying, billions in the world live in abject poverty. since we are a part of the problem, we At the same time, the industrial food must seek to be a part of the solution. system in the developed world, while ex- At a minimum, we have a responsibility tremely productive, is deeply implicated to understand the social, economic, and About Ben & Jerry’s in a wide range of serious social, envi- environmental impacts of our business ronmental, and economic problems that practices and seek ways to minimise, mit- • Founded by Ben Cohen and cannot be ignored in the long run. Some igate, or avoid the negative impacts that Jerry Greenfield in 1978 new technologies and processes in the are associated with them. But to fully with the opening of an ice industrial food system also present risks cream parlour on May 5 in meet our own vision, we must seek to to human and environmental health that Burlington, Vermont, United use our company to support different ap- are not well understood and that may States. proaches to global trade and agriculture not be worth the potential benefits. The that challenge the current paradigms; list of these problems and risks is long, • The use of chunks in Ben & that aim to be truly restorative; and that including: Jerry’s ice-cream is popularly promise to create social, economic, and attributed to Ben Cohen’s environmental benefits in the world. And, • Global climate change. Agriculture, anosmia, a lack of a sense of because our company is small, one of the including animal husbandry, is a major smell or taste: he relied on most important roles we can play is to source of global greenhouse gas emissions texture to provide variety become a vocal and unwavering advocate and contributes to deforestation. and intense flavours to his for serious reform of the global economy diet. • Loss of biodiversity. Croplands en- and the industrial food system. croaching on critical natural areas and We can achieve much throughout our • In 1988, the two men were other agricultural impacts are a major value chain by sourcing our ingredients awarded the title of U.S. cause of the massive species extinction in ways that confront climate change Small Business Persons of event the planet is currently experienc- and social equity. We call it “values-led the Year by U.S. President ing. Ronald Reagan. sourcing.” • Loss of agricultural genetic diversity – accelerated by the advent and dom- • The top five flavours of Values-led sourcing inance of genetically engineered crops. last year were (from five to • Incomplete understanding of envi- one): Phish Food, Chocolate ronmental, economic and health impacts Fudge Brownie, Chocolate 1. Caring Dairy™: We know that of transgenic plants and animals, nano- Chip Cookie Dough, Cherry dairy farming has a significant impact on technology, and other novel ‘food tech- Garcia, and Half Baked (a climate change. We are working to identi- nologies’ – in some cases without strong combination of brownies fy on-farm technology and management regulatory frameworks. and cookie dough). systems to reduce dairy farming’s impact • Fresh water scarcity; aquifer deple- on the environment. We’ve been working tion; disruption of marine ecosystems; • The Ben and Jerry’s ice with dairy farmers in Vermont and the cream factory has an onsite and degradation of surface water quality Netherlands for many years to help them ice cream graveyard with due to excessive irrigation, and overuse of push towards the leading edge of sustain- the graves of past ice cream nitrogen and phosphorus inputs. able dairy practices. Now, our global Car- flavours. Favourite flavours • Critical loss of topsoil through an- ing Dairy™ programme offers our farm- can be resurrected from nual cropping. er partners a practical framework for their grave to be brought • Human rights violations, econom- back into stores. understanding, evaluating, and improv- ic exploitation, poverty, and dislocation ing the sustainability of their dairy oper- among migrant workers and rural com- ations. The Caring Dairy™ programme munities. is based upon an easy-to-use web based • Destruction of rural communities’ self-assessment tool, which enables farm- economic and social fabric. ers to evaluate their farm against a com-

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carry the Fairtrade Certified seal. This does not mean that every ingredient (there are about 140!) in our products is sourced from Fairtrade producers. While all of our key commodities, which make up the bulk of our product, are traded in compliance with Fairtrade standards, 3. Non-GMO conversion: All of there are still a few ingredients, such as our ingredients sourced for our North Rob Michalak certain spices, nuts and fruits, that we are American production are non-GMO in- Global Director of Social unable to source from Fairtrade farms gredients, by seed source. Since we’ve Mission Ben & Jerry’s either because they are not available or been sourcing non-GMO ingredients by don’t meet our specifications. (And, we seed source in Europe and Asia for sev- Rob Michalak is the global should note, dairy does not fall under the eral years, we are proud to report that director of social mission for Fairtrade programme.) all of the ingredients we purchase are Ben & Jerry’s. Rob sits on Ben & In light of those ingredients we can- non-GMO by seed source (except for our Jerry’s global leadership team not source Fairtrade, we created the Pro- ice cream bars, which, again due to low and is the lead advocate at ducer Development Initiative (PDI) with production volume, were not part of the Ben & Jerry’s to keep its social our partner, Fairtrade International. The conversion). mission in balance with the PDI intends to build and strengthen the company’s product mission supply chain for Fairtrade producers. We and economic mission. Rob has Measuring what matters continue to develop the PDI to help Fair- been with Ben & Jerry’s twice. trade producers truly realise sustainable His first role at the company livelihoods. We’ve mapped our Fairtrade Transparency is increasingly impor- was as its public relations czar from 1989-1998. He came back supply chain to identify areas for im- tant. Ben & Jerry’s has been issuing public to the company to serve as its provement such as adapting to climate reports on our social and environmental social mission director starting change, improving yields and capacity, activities since our 1988 annual report. in 2006. Before that, and in diversifying, among other initiatives. Currently, we are using a model of met- between his Ben & Jerry’s days, rics that we call our Quality of Results Rob worked in broadcast media (QoR) framework to measure our perfor- holding a variety of jobs in mance in key priority areas. news, public affairs and inde- The QoR measures specific goals for pendent productions. “To fully meet our our social and environmental performance within 14 priorities of our busi- own vision, we ness. We also engage a third party to pro- must seek to use vide assurance that we are doing what prehensive set of economic, social and we say we’re doing. In recent years we environmental criteria, or “sustainability our company to have been using Moss Adams LLP, an indicators,” for farming. Leveraging the support different independent accounting firm based in results of the self-assessment, we then Seattle, Washington, to review specific help each farmer develop a unique ac- approaches to QoR indicators that Ben & Jerry’s sets as tion plan to improve his or her practices priorities for the year. in the identified areas. In exchange for global trade and Going forward, we plan to test some participating, Caring Dairy™ farmers get agriculture that adjustments to the QoR framework to a premium for their effort. better assess our impact on people and 2. Fairtrade-certified ingredients: challenge the the planet, as well as our practices and All of our products around the globe progress. We plan to raise the bar for were fully Fairtrade certified (with the current current QoR indicators, set annual tar- exception of our ice cream bars because gets for Social Mission initiatives and paradigms .” of low production volume). To be clear, clarify indicators of success and how we this means that all of our products (ex- can continue to improve upon our linked cept our bars) meet the specifications prosperity business model where we con-

Photo: Private Photo: required by Fairtrade International to tinue to turn values into value. •

communication director 4/2015 69 Issue Focus The unwritten contract in corporate governance

Companies that demonstrate trust in their employees and managers can find unexpected benefits along the way.

By David F. Larcker and Brian Tayan

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The role of trust “A corporate Although economists, psychologists governance system and sociologists use different definitions, fundamentally “trust” is having certainty based on trust about how another person will act. In might be more cost- a corporate setting, a trusting manager knows that his or her employees will C effective than one work diligently and in good faith to meet orporate governance systems exist to their commitments and a trusting em- discourage self-interested behaviour. built on elaborate ployee knows that a manager will adhere Although shareholders would like or- controls and to agreed-upon standards of oversight. ganisational participants—employees, Trust replaces the need for a written con- managers, executives and directors – to procedures.” tract because these two parties commit in work toward a shared goal of increasing advance (implicitly or explicitly) to abide corporate value, in reality each has indi- corrects this imbalance by aligning the by a set of actions, behaviors, or norms vidual interests that influence how they interests of insiders with those of share- that are mutually beneficial. Trust substi- make decisions on a day-to-day basis. To holders and encouraging insiders to take tutes for rigorous controls because these economists, this is fundamentally an in- actions that benefit the organisation as a controls become redundant. centive problem: the incentive to work for whole and not just themselves. An important presumption in the one’s own benefit is stronger than the in- An overlooked question is how ex- research literature is that relationships centive to work for the firm’s benefit. The tensive this system should be. The degree based on trust are more productive solution is to create a system – through to which a company requires rigorous than relationships based on contracts. contracts, controls and procedures – that controls depends on the degree to which In Trust and Distrust in Organizations (2004) Roderick M. Kramer and Karen S. Cook outline the many reasons why this is so. First, it is impossible to write a contract that specifies all behaviors. A contract to prevent self-interested behavior must necessarily be incomplete because it cannot anticipate all manifestations of self-interested behavior. By contrast, both parties in a trusting relationship generally understand the limits of acceptable behavior even when these are not fully specified. Second, an emphasis on contracts can cause employees to “work self-interest exists in the organisation. A to rule.” Strict enforcement of the terms look at governance systems today sug- of a contract has the unintended con- gests that self-interest is high because the sequence of emphasizing the minimum list of governance requirements is exten- amount of work required for an employ- sive. Companies spend tens of millions of ee to satisfy his or her obligations and dollars annually on incentive compensa- avoid punishment. A contract can there- tion, director salaries, audit fees, internal fore reduce, rather than increase, produc- auditors and compliance efforts to sat- tive effort. Third, trust creates a more isfy a long list of rules, regulations and predictable environment and predictable procedures imposed by legislators and environments are less costly. From an the market. Would corporate governance economic perspective, a “risk premium” improve if companies instead had fewer is required to deal with uncertain behav- controls? Would shareholders be better iour. Supervisors must put additional off if organisations instead demonstrated effort into monitoring employee actions more trust in employees and executives? and employees must exert additional ef-

communication director 4/2015 71 Issue Focus

tions arise. Audit fees, which average 3.9 million dollars among publicly traded companies, would therefore also be greatly reduced. fort to demonstrate that they are com- • Internal audit. The internal audit pliant with the firm’s standards. When function could also become unnecessary. trust is introduced into the environment, Companies would not require an inde- the motivations of each party are known pendent assessment of their accounts, (“certain”), their behaviors are predictable controls and procedures because employ- corporate and the “risk premium” is eliminated. ees would be trusted not to abuse the governance For these reasons, a corporate gov- system. Instead, the finance department ernance system based on trust might would employ a small staff of personnel • Corporate governance be more cost-effective than one built on to check accounts for inadvertent errors. structures and principles elaborate controls and procedures. How- Headcount in the internal audit depart- demarcate the distribution ever, in order for this to be true, self-in- of rights and responsibilities ment, which averages seven to fifteen terest within the organisation must be among different players in auditors in a typical organisation, would low. It must be understood and accept- the corporation (such as the shrink. ed by both parties that each will elevate board of directors, manag- • Executive compensation. Compen- organisational interests above self-inter- ers, shareholders, creditors, sation contracts could be simplified. ests. Employees have to know that they auditors, regulators, and Most companies today offer a complicat- will receive market-competitive rewards other stakeholders) and ed programme of fixed and contingent for meeting their obligations to the firm includes the rules and payments that vest over short- and long- and governance monitors have to know procedures for making deci- term time horizons to motivate specif- that they can trust the actions and mo- sions in corporate affairs. ic employee behaviors. In a trust-based tivations of employees. To build trust, a environment, an elaborate programme combination of structural and cultural • Interest in corporate gov- becomes unnecessary. Companies would ernance increased following changes is required. also no longer have to pay the risk pre- the high-profile collapses of Once established, a high-trust govern- mium associated with contingent (risk- a number of large corpo- ance system allows for the reduction or based) pay. Instead, companies would rations during 2001–2002, elimination of many of the costs, controls offer large fixed salaries, potentially sup- most of which involved and procedures that characterise today’s accounting fraud; and plemented with cash bonuses for achiev- governance systems. In the extreme case then again after the recent ing critical performance metrics. Equity (utopia), the following could occur: financial crisis in 2008. programmes, which require a larger risk • Board of directors. The responsibili- premium relative to cash programmes, ties of the board of directors could be sig- • Some European countries, would be scaled down or discontinued. nificantly narrowed. Rather than balance such as Germany and the • Compliance and legal. Finally, com- advisory and monitoring obligations, the Netherlands, require a two- panies could eliminate many of the bu- board would focus entirely on advising tiered board of directors reaucratic checks and controls that are management on matters involving strat- as a means of improving often implemented to prevent and detect egy, organisational design and risk man- corporate governance. In legal or regulatory violations. Instead, agement. Board-related compensation, the UK and US, the so-called employees would self-monitor, with line which averages two million dollars per “Anglo-American model” of managers responsible for reporting incorporate governance relies year among mid-sized companies, would advertent legal or regulatory missteps to on a single-tiered board of be greatly reduced. higher level executives. directors that is normally • External audit. The external au- Several examples exist of companies dominated by non-exec- dit could become largely unnecessary. that demonstrate trust in their employ- utive directors elected by Rather than sample a large number of shareholders. ees and managers, and each benefits from accounts for material misstatement and the types of cost reductions outlined check internal controls for deficiencies, above. For example, Berkshire Hathaway the external auditor would serve a much is renowned for granting considerable au- narrower role of clarifying the applica- tonomy to the operating managers of its tion of accounting standards when ques- various businesses. This allows the com-

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firms. Netflix does not offer incentive bonuses and equity compensation is only granted to employee’s that request it as a portion of their compensation mix. Still, a company that adopts a high- trust governance system cannot entirely eliminate the risk that its trust will be abused. The downside is potentially David F. Larcker amplified because the company will not self-interest. How should executives and Stanford University have effective controls in place to deal directors go about achieving this? Is a with the breakdowns when they occur. reduction of self-interest possible in all Professor David Larcker is the Such a situation might have occurred at industries, or are some industries inher- director of the Corporate Gov- Johnson & Johnson, which historically ently more likely to attract individuals ernance Research Initiative at has maintained a highly decentralised who put their own interests first? Are the Stanford Graduate School management system. In 2009, this struc- CEOs of a certain personality type more of Business and senior faculty ture was challenged when the company capable of developing trust? • of the Arthur and Toni Rembe issued the first of what eventually be- Rock Center for Corporate Gov- came three dozen product recalls due to ernance at Stanford University. faulty manufacturing in its consumer Professor Larcker was previous- healthcare division. A Fortune magazine ly the Ernst & Young professor article blames the recalls in part on “a of accounting at the Wharton wrenching cultural change and a quality School of the University of assurance department that crumbled as Pennsylvania and professor of accounting and information mistakes were overlooked.” systems at the Kellogg Gradu- ate School of Management at Why this matters Northwestern University.

Research suggests that companies might benefit by raising the level of trust in their organisations. High-trust settings Brian Tayan pany to maintain an extremely modest are characterised by lower bureaucracy, Stanford University headcount of only 24 staff at company simpler procedures and higher produc- headquarters, despite having 288,000 tivity. Would shareholders be better off Brian Tayan is a researcher employees worldwide. Real estate com- if companies had fewer formal corporate at the Corporate Governance Research Initiative at Stanford pany Keller Williams maintains a strict governance requirements and instead de- Graduate School of Business. “open books” policy. All agents within the voted greater effort to fostering trust? He has co-authored two books, company’s market centers have access Furthermore, prominent corporate Corporate Governance Matters to detailed information about the office’s failures in 2001 (Enron, WorldCom, etc.) and A Real Look at Real World revenues, commissions and costs. This and 2008 (Lehman Brothers, AIG and so Corporate Governance, in reduces opportunity for theft, waste, or on) ushered in an increase in regulatory collaboration with Professor special dealings; and also the need for a requirements for corporate governance. David F. Larcker. Previously, robust internal audit department. Final- However, the standards they imposed on Brian has worked as a financial ly, Netflix is known for maintaining a board structure, internal controls and analyst in the Office of the CFO high-performance culture rooted in the compensation were designed with the at Stanford University and as concept of “freedom and responsibility.” worst offenders in mind. Is it cost-effec- an investment associate at UBS Employees are expected to work hard, tive to impose these same standards on all Private Wealth Management in take ownership and put the company’s companies? Should average companies San Francisco. interests ahead of their own. In return, be presumed to be more “trustworthy?” the company offers top-of-market sala- Finally, in order for a trust-based gov- ries equivalent to the combined value of ernance system to work, companies must

: Private (2) Private : Photos the salary and bonus offered by other first develop a culture that discourages

communication director 4/2015 73 Issue Focus Setting standards for progress

Is it a bird? Is it a plane? Companies give more to society than just products and services. To maximise positive impact,

it is crucial that these benefits are Through the contributions we make communicated effectively to employees to the exchequer, our presence facilitates and the wider community. the role of governments to deliver appropriate infrastructure and valuable services to societies. The scale of our operations also makes us a major economic By Roma Balwani contributor through the flow-on effect of our activities. By sourcing products and he natural resources in- services locally, we generate significant dustry is one of the key economic activity and promote the de- contributors to modern velopment of local skills and job crea- society as, without raw tion. This is particularly relevant as the T materials, the lifestyle that majority of our operations are in the de- so many of us enjoy today would not veloping world and we are committed to be possible. The resources we bring to enabling the sustainable development of the market have a myriad uses, creating these societies. the basic building blocks of society: iron The natural resources sector is inher- ore is used in transport networks and ently sensitive with a large number of building infrastructure; copper is used to affected groups, ranging from employees connect people through telecommunica- and shareholders to local communities tions and in lifesaving medical devices, and environmental groups. Resources and aluminium is used across diverse companies therefore carry with them a products, including food packaging and significant range of constantly evolving as a lightweight material for automobiles, risks. To mitigate these they must devel- reducing fuel emissions. Furthermore, we op robust processes and systems while generate electricity that lights the lives simultaneously balancing the relative of millions of people and our crude oil is risk/reward equations expected by their an essential component of thousands of stakeholders. As economic headwinds secondary products. persist, the spotlight will remain on the

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industry, which will be expected to proac- Sustainable development is a core This includes activities that we under- tively engage its stakeholders while mak- element of our guiding strategy and sup- take across our operations to ensure the ing improvements to existing financial ports our growth as a diversified natural health and safety of our people, how we structures. resources company. Our Sustainable De- make valuable economic and social con- At Vedanta we foster an environment velopment Model reflects our strategy to tributions to communities and regions which encourages teams to constantly commit, connect and care, with its pillars where we operate, and how we manage benchmark and adopt best-in-class prac- of responsible stewardship, adding and our environmental footprint. tices, such as the company’s community sharing value, building strong relation- We continue to implement sustain- development programmes that enrich ships and strategic communications. This ability controls through a robust audit our host communities. We make sure model reflects our dedication to trans- framework; the Vedanta Sustainabili- that our actions and policies are not only parency and to engaging in meaningful ty Framework which is aligned to IFC, law abiding, but also in line with the high- dialogue with all of our stakeholders. It is ICMM and OECD standards. We work est levels of business ethics and personal integral to our core business strategy and with think tanks and institutional bodies integrity. Our stakeholders expect us to helps us conduct our business in line with on developing these standards, including maintain the highest ethical standards our key values of trust, entrepreneurship, structured programmes on reducing wa- and to fulfil our commitments. As In- innovation, excellence, integrity, respect ter, energy and carbon consumption. dia’s leading diversified natural resources and care – whatever the jurisdiction. We endeavour to integrate our sus- company, we endeavour to live up to our tainability objectives into our long term reputation and stakeholder expectations. “We make sure planning. Our businesses seek to identify Protecting our social licence to op- and minimise any potentially negative erate has always been a key priority for that our actions operational impacts and risks through Vedanta and we are aware that our ac- responsible behaviour – acting transpar- tions influence the global view not only of and policies are not ently and ethically, promoting dialogue Vedanta, but also of India. It is an exciting only law abiding, and complying with commitments to time for the world’s largest democracy. stakeholders. Establishing and main- Prime Minister Modi’s government con- but also in line with taining close links with stakeholders is tinues to drive reforms to make India an an essential part of our journey as a sus- easier place to do business by opening up the highest levels of tainable business. the country to foreign investment. business ethics Our active engagement and deep understanding of the countries, communi- and personal ties and environments where we operate, integrity.” combined with our Tier 1 assets, forms the foundation of our business strategy, and positions our group to create value for our shareholders and other stakeholders. Vedanta places special emphasis on ensuring that communities’ rights are protected at all times, and engages with local people through meetings, public hearings, grievance mechanisms, cultural events and philanthropic activities. We conducted over 4,600 village meetings during the last financial year, which gave local communities the opportunity to voice their opinions and concerns. We have consolidated the best practices of community development, aligning these with Vedanta’s business imper- atives to create a social licence to operate strategy. Our approach to community development is holistic, long-term, integrated and sustainable, and is governed

75 Issue Focus

by two key considerations – the needs of team took the initiative to instil the code’s the local people and development plans principles into the group’s workplace and which are in line with the UN’s Millenni- culture. More than 2,000 employees have um Development Goals. We are now in Vedanta attended our chairman’s workshop over the process of aligning our community the past five years, while our chief execu- development programmes with the UN’s • Vedanta Resources plc tive visits operations around the world on Sustainable Development Goals. (LSE:VED) is a global a regular basis, hosting feedback sessions Structured community development diversified natural resources and forums on local issues including wel- programmes continue to operate at var- company headquartered fare, gender diversity and safety. ious locations. At Vedanta, the board in London, UK, and has Our robust internal communication level Corporate Social Responsibility operations in India, Zambia, strategy engages with our people through Committee monitors the focus areas of Namibia, South Africa, in-house newsletters, journals and stra- CSR activities, budgets and programmes Ireland, Liberia, Australia tegic messaging from the chairman and undertaken by our businesses. In 2015, and Sri Lanka. chief executive. Vedanta’s employee we completed our most comprehensive, education programmes and feedback • Its subsidiary, Vedanta structured and collaborative communi- mechanisms involve employees in deci- Limited, is India’s only ty needs assessment exercise in India, sion-making, engendering a sense of em- diversified natural resources reaching every village in the vicinity of powerment and ownership. The aim is to company. The group produc- our operations. In this way, we help lo- make employees aware of brand values, es aluminium, copper, zinc, cal communities identify their priorities lead, silver, iron ore, oil and and for every individual to deliver on the through needs assessment programmes, gas and commercial energy. corporate brand promise in a way that’s then work closely with them to design authentic, and that imbues the corpo- programmes that seek to make progress • The company was founded rate identity with what ignites them and towards improving their quality of life. in Mumbai in 1979 by Anil makes them exceptional. Agarwal, who is also its Research shows that a diverse team executive chairman and was Communicating sustainable brings differing perspectives and delivers first listed on the London better results. Vedanta remains commit- governance Stock Exchange in 2003. ted to a series of diversity targets, which we have developed in line with our Sus- The strength of a company’s corpo- • Vedanta or Uttara Mīmāṃsā tainable Development Model and which rate governance framework relies on is one of the six orthodox includes boosting female representation schools of Hindu philosophy. the extent to which it is communicated at board level to 25 per cent. Several ap- The word ‘Vedanta’ origi- clearly, effectively and continuously, both pointments in recent months have un- nates from the Vedas, the throughout the business and to the out- derlined Vedanta’s commitment to diver- ancient scriptures of India. side world. Vedanta has always been a sity within the organisation, including at ‘Vedanta’ means ‘ultimate responsible corporate citizen, but in the knowledge’. the most senior levels. current climate there is a need to rede- Vedanta’s communications activities fine how we communicate our policies, include press releases on key develop- procedures and initiatives outside the ments; meetings between senior execu- organisation. Through comprehensive company’s values with our employees, tives and institutional investors, analysts and continuous engagement with our so that we can use their individual tal- and brokers; site visits by institutional in- stakeholders, we assure them that the ents to help meet our broader corporate vestor representatives, analysts and bro- company is meeting all the legal, social, objectives. It is critical that we help em- kers; and ongoing dialogue with share- financial and other requirements expect- ployees to understand the way in which holders and other interested parties. ed of a leading global mining company. they impact the company’s brand when At Vedanta, we believe that our peo- exhibiting behaviours that run counter Communicating during the ple are our most powerful brand assets. to their promise. Powerful brands aren’t built only by the Vedanta’s Code of Business Conduct commodity crunch products they produce, but by the em- and Ethics is an overarching set of prin- ployees who are the engaged and commit- ciples designed to address human rights, While Vedanta has made great ted resources within any organisation. insider trading and confidentiality, fraud, strides towards better communicating The challenge for us is synergising the bribery and corruption. Our leadership the strength of its corporate governance

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initiatives, public expectations of global with detailed information about Vedan- businesses have never been greater, and ta’s economic contribution to the coun- we are increasingly seeing companies tries we operate in. held accountable for irresponsible and Vedanta’s Annual Report doesn’t just opaque practices around the world. address mandatory requirements, but re- Delivering on these expectations is ports sustainability in an effective way, about more than just ticking the right box and makes our commitment to social and and adhering to a set of rules and regu- environmental responsibility absolutely ROMA BALWANI lations. It’s about embedding a culture clear. The Annual Report is accompanied President, Group Sustainability, of responsible behaviour throughout an by the Business Responsibility Report. Corporate Social Responsibility organisation and encouraging full, trans- Vedanta’s sustainable development ac- and Communications, Vedanta parent and ongoing dialogue, both inter- tivities are published in the company’s Resources nally and externally with stakeholders. Sustainable Development Report, which At a time of great global economic is distributed to our stakeholders and is Roma Balwani is responsible uncertainty, when shareholders, author- also available on our website. for driving sustainability, cor- ities, the media and the general public are porate social responsibility and demanding a higher standard of corpo- communications as a strategic rate governance and social responsibility function at Vedanta. Prior to than ever before, we aim to stay ahead of “It’s about joining Vedanta in 2014, she the curve and over-deliver on our com- embedding a culture headed communications at mitments through ongoing engagement. Indian companies such as The annual general meeting remains of responsible Mahindra & Mahindra Limited, the primary meeting point for share- and global firms such asUK - based travel portal ebookers. holders and typically involves full and behaviour com. In a career spanning more frank discussions on a variety of topics. throughout an than 30 years, she has received But the AGM is only the starting point. several prestigious communi- In today’s economic environment, it is organisation and cations awards and this year critical that there is an ongoing dialogue encouraging full, she has the distinction of being with shareholders, analysts and the in- included in the 50 Most Talent- vestor community. Our chief executive transparent and ed Sustainability Leaders list by regularly meets with institutional inves- World CSR Congress. tors, analysts, brokers and fund manag- ongoing dialogue.” ers to ascertain their views on a wide range of issues affecting the company. Our stated core purpose is: “Vedanta Our executives and management also In March, to further promote en- is a globally diversified natural resources meet proactively with other key groups gagement with the analyst community, a company with low cost operations that including civil society organisations, me- Capital Markets Day was held in London empowers its people to drive excellence dia and industry associations, to increase where a corporate and financial overview and innovation to create value for stake- awareness about our business, explain of the company’s various businesses was holders. Vedanta demonstrates world- our point of view and answer queries. presented. The event was attended by sev- class standards of governance, safety, Tax transparency has been a topi- eral members of our management team sustainability and social responsibility”. cal issue in recent years, particularly and our investing community. We held Perhaps the best description of Ve- for global companies with operations our first Sustainable Development Day in danta’s DNA is Michael Porter’s definition covering multiple tax jurisdictions. We London this July, which brought the com- of shared value: “Policies and operating published our first voluntary tax trans- pany’s leadership and chairman together practices that enhance the competitive- parency report earlier this year, showing with socially responsible investors. Our ness of a company while simultaneously the contributions we make to the excheq- chief executive, sustainability chairman advancing the economic and social con- uers of countries in which we operate. and the chief executives of our various ditions in the communities in which it The publication of the report reflects our businesses discussed how the company operates. Shared Value creation focuses view that transparent financial reporting puts its sustainable development model on identifying and expanding the con- is critical to our reputation and licence to into practice, including case studies from nections between societal and economic

Photo: Private Photo: operate, and provides our stakeholders our operations on the ground. progress”. •

communication director 4/2015 77 Issue Focus The evolution of corporate reporting

The journey to a new style of reporting on social and environmental initiatives

By Carol A. Adams

78 communication director 4/2015 Issue Focus

isations that don’t treat people and the environment responsibly have suffered significant reputational damage and financial losses. What makes a good Clever – and successful – organisa- corporate social tions are recognising this. responsibility Paul Polman, Unilever’s chief execu- communicator? tive officer, has made a clear connection between long term business success and • knowing when and how to tackling social and environmental issues: key challenge in commu- use social media “The biggest challenge is the con- • having good relationships nicating an organisations’ tinuing threat to ‘planetary bound- with those collecting corporate social responsi- aries’; resulting in extreme weather and analysing social bility initiatives is making patterns and growing resource con- and environmental data A those initiatives sound straints. These have increasing im- and the rest of the like they matter to the organisation. That communications team pact on our business (…) We remain requires an understanding that they do • understanding of key social convinced that businesses that both in fact matter and that they are more and environmental issues address the concerns of citizens and than just a nice to have. which concern your stake- the needs of the environment will pros- All too often social, community and holders and sharing them per over the long term… As [the Unile- environmental initiatives are written up • accepting of the impor- ver Sustainable Living Plan] becomes as case studies, as positive things to do tance of communicating embedded, there is growing evidence with a smattering of public relations fluff without embellishment that it is also accelerating our growth.” thrown in to emphasise how good the • understanding how your (Unilever annual report and accounts company is to do them. Not very con- social responsibility work 2012 ) vincing, and it also misses the point that adds value to your organisa This is not an isolated statement. doing good is essential to an organisation and fits with its strategy There are a number of things in Unile- tion’s success. ver’s annual reports that make the com- Five essentials to pany stand out as a leader in connecting communicating business success and value for investors Being responsible is corporate social with value for society. The 2013 annual responsibility essential to the report succinctly captures the moral and organisation’s success • leave out the self-congrat business imperative for thinking in a ho- ulatory PR fluff (keep listic, integrated way: “Business needs to Why is socially and environmental it factual and accurate) be a regenerative force in the system that responsibility essential to an organisa- • demonstrate alignment with gives it life”. It all stems from Unilever’s tion’s success? Well, no organisation can your strategy and vision vision to double the success of its busi- survive without good relationships with (ensure your messages are ness while reducing its environmental its communities, customers, people, sup- consistent) footprint and increasing its positive social pliers and other stakeholders. Building • Use data to demonstrate impact, so there is a consistency across those relationships involves building what you’ve achieved these statements. trust (hence the need for accurate, pur- (but only if it’s accurate) The vision and strategy are backed poseful reporting) and creating value for • explain how your actions add up with hard data and targets. There’s value to your organisation a broad range of stakeholders. alignment with vision and strategy and a • Make it readable and inter Economist Milton Friedman famous- powerful visual putting sustainable living esting with innovative vis ly said that the role of business executives at the centre of their business model. This uals portraying outcomes is “to make as much money as possible demonstrates that social and environ- while conforming to the basic rules of the mentally responsibility is integral to Uni- society” (New York Times Magazine, Sep- lever’s success and that the reports comply tember 13, 1970). Since his time, the basic with the ‘five essentials to communicating rules of society have changed and organ- corporate social responsibility’.

communication director 4/2015 79 Issue Focus

Meaningful communication Communication and engagement with stakeholders, including staff, is an Communications of social and en- important part of the process of trans- vironmental issues and activities which formation required by today’s businesses embellish positive outcomes, underplay Executive Summary to work in a global environment with or gloss over negative outcomes or which social and environmental mega forces contain inaccurate data will create mis- • Communication with impacting on business success – both trust and can damage reputations. It is stakeholders is vital if now and in the future. Effective commu- important to address the big issues and businesses are to work in nication and engagement is an essential a global environment with check the presentation of information part of both developing a strategy which social and environmental with those who know the data, to ensure is responsive to social or environmental mega forces impacting on it faithfully represents the facts. If you risks and opportunities and delivering business success. don’t, the press and other sources will ex- on that strategy. Many of the activities pose inconsistencies and misrepresenta- • Founded in 1997, The Global companies engage in, such as employee tions as well as material omissions. This Reporting Initiative is an volunteering for social good and equal results in a ‘portrayal gap’ – a mismatch international standards opportunities initiatives, are an impor- between how you portray your organi- organisation that helps tant part of that transformation, chang- sation’s performance and how it is por- organisations communicate ing the way employees think and behave trayed by external sources. The reality their impact on a range of both at work and home. They also change may be somewhere in between, but the societal issues. broader perceptions about the company. reputational damage is done. • Global Reporting Initiatives Meaningful communication requires The corporate an understanding of the issues, their im- guidelines requires busi- pact on stakeholders and the concerns nesses to set out approach reporting landscape that stakeholders have in relation to to stakeholder engagement, including frequency of them. This requires an on-going engage- Corporate reporting is changing and engagement. ment where stakeholders have an oppor- communication professionals have an tunity to express views which are heard important role to play. • Integrated reporting and responded to. Reporting on the processes of com- requires businesses to spell out how they create value – municating and engaging with stakehold- When things go wrong for investors but also other, ers to identify material issues has been broader stakeholders. best practice in sustainability reporting for some time and companies reporting It is not enough to simply acknowl- • The International Integrated under the Global Reporting Initiatives edge the link between doing the right Reporting Council (IIRC), G4 guidelines are required to set out their thing and delivering value to stakehold- was launched in 2010. stakeholder engagement process. A new ers – a company needs to set out its tar- form of corporate reporting, integrated gets and say how this will be achieved. reporting, involves articulating concise- And bragging without the facts to back it ly how your organisation creates value up is never a good idea. VW must regret for providers of finance. Some compa- saying in its 2014 annual report: 2018 – both economically and ecologically.” nies are also thinking about how they “Thanks to its corporate culture, VW’s commitment to responsibility and create value for a broader range of key Volkswagen is better suited than almost ecology have been questioned and the stakeholders, employers, customers, sup- any other company to combine a mod- fact that they claimed a strong commit- pliers and so on – as well as providers of ern understanding of responsibility ment to these values only serves to in- finance. And of course, in some organ- and sustainability with the tradition- crease the mistrust. isations, providers of finance might be al values of running a business…” (p118). members or customers (for example, in a It follows a claim by the CEO, Martin Communication and customer-owned bank) or employees (in Winterkorn (p4): an employee-owned organisation). “Our pursuit of innovation and perfec- engagement to aid This involves both understanding tion and our responsible approach will help transformation how you create value and, equally im- to make us the world’s leading automaker by portant, articulating that in a concise and

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meaningful way so that others under- it will delivered and how the company stand it. Organisations are drawing on has, and will, create value for providers of the skills of communications profession- capital and others in the short, medium als to do this. and long term. This approach allows a different style The International Integrated Report- of reporting on social and environmental ing Framework (see http://integratedre- initiatives – one which focusses on value porting.org) recognises that long term created rather than the impacts or costs success depends, amongst other things, Carol Adams of such initiatives. on sound management, relationships, a Durham University, England Integrated reporting requires think- satisfied work force and the availability ing about value beyond financial terms of natural resources. Carol Adams is a professor of – a long overdue development given Critical to good relationships and a accounting at Durham Univer- that around 80 per cent of the value of satisfied workforce is a communications sity, an advisor on corporate a company is typically in intangible as- plan which sets out to achieve this. An reporting and integrating sus- sets. Building strong relationships with integrated report fills some of the gap tainability into organisational practices and a non-executive stakeholders, building a loyal customer and allows an organisation to tell pro- director. She writes on her base, developing intellectual capital and viders of capital, and others, how it cre- website Towards Sustainable managing environmental risks and so on ates value for them – including through Business at tends to fall off the radar when corporate those communication and engagement www.drcaroladams.net. executives think short term. But they are processes. • critical to long term success. Integrated reports are forward looking documents

Photo: Private Photo: covering strategy, the context in which

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communication director 4/2015 81

IpsosMori_ad_210x140_v2_041115.indd 1 05/11/2015 15:51 Issue Focus

Collaborate and empower By promoting several programmes around the world, Coca-Cola İçecek harnesses the power of business to change our world for the better.

aykan gulten

nspiring youth in Turkey, Iraq and our dedicated staff members. This and Pakistan to get moving – philosophy guides us in every initiative actually, physically – and to and partnership we engage in, ensuring keep moving throughout their that our objectives regarding corporate I lives is the goal of 3.2.1 Move! social responsibility remain suitably A meaningful programme initiated by aligned with our business strategy and which focus on inspiring, empowering, Coca-Cola İçecek (CCI) in partnership capabilities. and engaging a generation of youth as to with Mercy Corps, 3.2.1 Move! is another CCI’s sustainability strategy is based the importance of leading an active and example of how CCI remains committed on The Coca-Cola Company’s global sus- healthy lifestyle. Put into practice, our in- to improving the lives of those who live tainability framework and the materiali- vestment into communities includes pro- in the communities we serve. ty analysis we conducted with our inter- jects and programmes such as 3.2.1 Move! We know our business can only be nal and external stakeholders. Promoting in Turkey, Iraq and Pakistan, the Active as strong, sustainable and healthy as active and healthy lifestyles in our com- Family Project in Azerbaijan, and the the communities we proudly serve. CCI’s munities, especially for youth, is one of Coca-Cola Grassroots Football Tourna- well-being is wholly interwoven with the promises we give to our stakeholders. ments in several countries – all of which the well-being of all our stakeholders, It is also one of the main focuses of are making a real difference in the lives of including our consumers, our partners, CCI’s community investment programs tens of thousands of young people.

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Launching the 3.2.1 Move! reveal that when young people are given programme new activities and upgraded school facil- “I believe in the ities, they start to participate in quality power of business We developed 3.2.1 Move! in 2013 with physical education. the aim of supporting the social and The goal is to transform schools into to change our world physical development of young people, active and healthy habitats through for the better. Not raising their awareness of the benefits projects that include opportunities for of adopting an active, healthy lifestyle, youngsters to develop, physically as well in theory, not in and helping them to develop a lifelong as socially. In practice, physical education habit of physical activity. So far, we have teachers share innovative ideas that serve the distant future, touched the lives of nearly 80,000 young their school best – from turning an aban- but right now. And people in Turkey, Pakistan and Iraq doned indoor area into a dance studio to through this valuable programme, and creating an outdoor space for games such it comes down we will continue to expand it in 2015 and as bocce, korfball, badminton, volleyball beyond in order to reach thousands more. and basketball. to companies Investing in the infrastructure of Based on field research conducted so and individuals schools, promoting physical education far, the programme has not only increased for young people and helping coaches and the time spent pursuing physical activi- doing something youth motivate and lead their peers to ties, but it has also significantly increased become physically active, the 3.2.1 Move! the self-confidence and self-esteem of extraordinary in story began in October 2013 in Turkey. We many young people while strengthening the ordinary course identified physical education teachers as peer relationships. Today, 80 per cent of the key stakeholders and change agents teenagers involved in 3.2.1 Move! say they of doing business.” of this programme, so we reached out exercise more because of the programme, Muhtar Kent, the Chairman and CEO of The Coca- directly to educators who were invited to and 66 per cent say that activities related Cola Company. discuss opportunities for helping young to the programme have made a positive people to become more active. The result impact on their friendships. programme in Pakistan and Iraq. In turn, was fantastic: an inspired, motivated and these coaches and leaders have gone on committed group of coaches starting a Expanding into to train more than 5,000 young people to movement destined to bring joy and the become community leaders in their own benefits of physical activity to young peo- Pakistan and Iraq right. In these countries, the programme ple throughout the country. focuses on low-income communities Based on the success of the pro- where after-school programmes, educa- How the programme gramme in Turkey, CCI partnered with tional development opportunities and Mercy Corps, a global humanitarian or- sports programmes are in short supply. works in Turkey ganisation that empowers people to re- In both Iraq and Pakistan, there are cover from crisis, build better lives and many security issues and challenges for Since its inception, 3.2.1 Move! has transform their communities for good, young people. 3.2.1 Move! offers them a expanded from three to eight provinc- to help bring 3.2.1 Move! to Pakistan and safe space to gather, learn from and cones in Turkey. As many as 285 public Iraq. The initiative in these countries is nect with each other. Each week, youth schools have applied to participate, with unique because not only does 3.2.1 Move! leaders guide their teams in physical 72 of these receiving assistance from the emphasise physical activity, it also aims activities and games which address the programme inspiring and empowering to enhance life and leadership skills. One programme’s core themes of teamwork, teachers, creating indoor and outdoor fa- goal of the programme, for instance, is to leadership and communication. cilities, providing sports equipment for support and encourage mentorships in These leaders begin to run their very students and organising sports festivals. order to support the positive development own projects, upgrading school facilities, To date, more than 50,000 students have of youngsters. To achieve this goal, 3.2.1 increasing awareness of health issues benefited. Move! is teaching the youth teamwork, and even organising sports activities and 3.2.1 Move! provides not only fun leadership and communication skills. competitions. They share what they have spaces where young people can be active In 2014, the 3.2.1 Move! programme has learned and otherwise help their commu- but also the opportunity to learn and trained 186 youth leaders aged between nity members to become healthier and connect with others. Programme results 15 and 19 and 86 coaches to spearhead the more active.

communication director 4/2015 83 Issue Focus

CCI’s Sustainability Framework by offering reduced-calorie products partnerships and collaboration with but also as a result of our transparent both local and international partners, Sustainability stands out as one of the labeling practices, our responsible mar- we identify needs in our communities five main pillars of CCI’s 2020 Vision. keting practices and the many physical and develop projects to address them, Our sustainability framework, what activity programmes we support encouraging our employees and stake- we call “Me, We, World,” is our shared around the world. Our “we” sustaina- holders to also take an active part. That vision with The Coca-Cola Company bility framework component is about part of our sustainability framework for how we can create social value, our employees and the communities which focuses on minimising our enable positive changes for consumers we operate in. The business success of environmental impact is represented and communities and help protect our CCI depends on our employees, and by “world.” CCI recognises that it is environment. Accordingly, “me” refers we know that we can be strong only if essential for the sustainability of our to providing high-quality beverages the communities we serve are strong. business, as well as for the sustainabil- while working to inspire happier, While developing and retaining the ity and welfare of the communities in healthier lives. Our commitment to our best talent, CCI’s priority is to provide a which we operate, to reduce as much consumers and their well-being begins happy, safe and motivating workplace as possible any negative impact of our with ensuring that each and every where our employees can fulfill their operations. Therefore, we are contin- beverage we deliver is safe. Further- true potential. Likewise, we strive to ually refining our processes to ensure more, we work to inspire consumers to strengthen and enhance the com- that we conserve natural resources and embrace healthier lifestyles not only munities where we operate. Through generate less waste.

84 communication director 4/2015 Issue Focus

So far, these volunteers have imple- come your change agents. Physical ed- mented 127 events across Pakistan and ucation teachers, coaches, and youth Iraq promoting physical activity and lead- leaders in our programme are great ership, reaching more than 40,000 people. examples of effective change agents. This incredible experience has significant- Sitara Saqib, a 3.2.1 Move! Pro- ly increased volunteers’ confidence and gramme coach from Sadar School in has garnered the respect of the commu- Pakistan, says: Aykan Gulten nity. An impressive 80 per cent of young- “The programme gives me confi- Corporate Affairs Director, sters participating in 3.2.1 Move! claim to dence to organise an event and im- Coca-Cola içecek be more physically active than they were prove my management skills. I wasn’t

before becoming involved with the pro- Aykan Gulten is corporate expecting so much contribution in or- gramme. Moreover, parents are reporting affairs director at Coca-Cola ganising from students. But it was like significant positive changes in their chil- içecek (CCI) Turkey, which is every student was playing her role in dren, with 90 per cent saying that their the fifth-largest bottler in the making the event successful.” children are more active and 60 per cent Coca-Cola System in terms of Innovate: It is unlikely that exist- saying their children are healthier. sales volume. CCI produces, ing methods will always solve existing distributes and sells sparkling problems. Corporations are generally and still beverages across Creating a successful very dynamic and require innovative Turkey, Pakistan, Kazakhstan, solutions to business problems. Like- CSR programme Azerbaijan, Kyrgyzstan, Turk- wise, you will be best served by adopt- menistan, Jordan, Iraq, Syria ing an innovative mindset while devel- Based on our experience with 3.2.1 and Tajikistan. oping any strategic CSR programme. Move!, we have identified the following Corporations have more valuable as- key drivers for creating a successful CSR Focus on the impact on society: sets than cash to offer communities, so programme: There is no short cut or easy win when tap into your company’s talent pool to Know your issues: Your strate- it comes to creating social value. From uncover untapped innovation as one gic CSR investment must be focused the very beginning, your programme way to aid in solving problems. on one or more issues for which you needs to be designed in such a way Engage your employees: Seeing actually have the capability to create that it actually, positively influences is believing. We were able to demon- value and on which you are expect- the lives of people. If it does not add strate the power of the programme to ed to act. CCI’s 3.2.1 Move! is a highly value to the community, it won’t add our employees and company execu- strategic programme, not only as far value to your business. tives only after encouraging them to as creating social value for thousands Hala, a youth leader from Al-Se- participate in it. Employees adopted of young people but also as far as pro- feena High School for Girls in Iraq, a few schools in the vicinity of our of- viding CCI with a genuine platform shares with us her views, offering fices, donating cash and sports equip- from which we can engage with key some insight as to the social impact ment to improve them. Moreover, we stakeholders such as public health that is delivered by the programme: organised sports days in those schools, authorities on matters regarding “It felt great planning and doing and our employees participated en- physical activity and the fight against events aimed at making our school thusiastically. obesity. As a part of the programme, more beautiful! For the first time I Corporations increasingly realise that we organise regional sports festivals learned how to work as part of a team, future success will depend on adhering to in collaboration with local municipali- dividing tasks and helping each other sound business models and engaging in ties and local public health authorities. to get the best possible results.” partnerships that improve the wellbeing Meltem is a fifth-grade student Collaborate and empower: So- of all stakeholders in their value chain. from Turkey. Explaining how the cial problems are complex, and so are In this light, corporations can no longer programme inspired her to adopt an their solutions. Partnerships may pro- afford to treat corporate social respon- active and healthier lifestyle, she says: vide solutions to those complex social sibility as only corporate philanthropy. “I have sinusitis and asthma. I was problems, but in order for them to Instead, CSR must feature at the front overweight, but I lost 25 kilos as a result be effective you must understand pre- and center of any meaningful growth of athletics and football. Now, I am cisely what motivates your partners strategy. • more active than before. I exercise 10 and then empower and equip them

Photo: Private Photo: hours a week, including my PE classes.” with right tools so that they can be-

communication director 4/2015 85 Issue Focus Changing the

It is up to each one of us to be our rules own heroes and demand corporations adhere to responsible conduct.

by malcolm mcintosh

86 communication director 4/2015 Issue Focus

Four hundred years later the role of panies. Its survival strategy has been to state owned, or controlled, enterprises is spread its risk across multiple compa- not dissimilar in advancing the influence nies and markets. The total assets traded of nation-states. In 2013 of the largest 100 worldwide by all investment companies companies 19 were state owned enter- in 2013 were valued at 225 trillion US dol- prises – the majority Chinese, Russian lars. or Brazilian. Nation-state expansion has It was not capitalism per se but this always been initially carried out by trad- particular model of capitalism and the ers and business interested in capturing men and women of the corporations that ow many times have I raw materials, cheap labour and markets. operated it that are to blame for this spec- been at academic sym- In 2014 the Anglo-Dutch conglom- tacularly unstable global political econo- posia, street demonstra- erate Unilever operates in 156 markets my. As John Lanchester has said in his tions or in classrooms worldwide and its direct competitor, the many books on modern capitalism, most H and been told that “cap- US Proctor and Gamble, has some four of us do not understand how the system italism is in crisis” or that “capitalism is billion regular customers worldwide. Just works despite the fact that our lives are the devil’s work” or “capitalism is incom- as in earlier centuries, in the 21st century inextricably linked to it. patible with equality”? Obversely, there it is corporations that often have the long- is often an extreme reaction against this est arms – including now information, In search of a attack on capitalism. Most of the discus- data processing and telecommunications sions are in reality discussions of political companies. But today the extent of corpo- new rule book economy and not lambasting the idea rate interests is under extensive scrutiny of capitalism. Also many of the current since the public bailout of private compa- Rules and processes that facilitate discussions in the 21st century about cap- nies in 2008/9. competition in all spheres of life, that italism are discussions about supraterri- commoditise and marketise all aspects torial corporations and/or banking. of society, and that see all decisions as However, I dispute that capitalism is essentially economic and transactional per se a bad idea, or has a tendency to bad. does not necessarily mean small govern- Capitalism simply means investment of “Most of us do not ment. This ideology is based on the fun- some sort in an idea for a return of some damental and profound misconception sort with the risk taker being allowed to understand how that markets are both rational and moral: retain some of the rewards. This is why the system works that they deliver outcomes that benefit all. the ideas behind capitalism, such as risk, Rather it is a mixture of markets, trade, investment, returns, property rights, the despite the fact cooperation, social cohesion, and collabo- rule of contract and management, come that our lives are ration that produce social benefits. up for discussion on a regular basis. It is Managing a socially just market econ- the current model of capitalism that is inextricably omy with requisite freedoms and human in need of rapid change and not the idea rights provisions requires the manage- itself. It is not capitalism that is normally linked to it.” ment of uncertainty and complexity, as being discussed, but management and well as flexibility, and these features may governance issues – and often nowadays be beyond the abilities of the average pol- corporate social responsibility. itician, and are certainly beyond the ca- How do we hold to account, for in- pacities of a politician ideologically glued The business of capitalism stance, the world’s largest investment to a particular creed. It is fine to have a management company Black Rock, who clear vision and set of transparent values in 2013 controlled 14.1 trillion US dollars but this is not the same as dogmatism. In the 16th century the English Queen in directly traded assets and 11 trillion US Capitalism and economics did not fail Elizabeth I granted permission for 218 dollars in overseas assets? Fifteen trillion in the 2008/9 crash because it has no merchants a monopoly of trade east of US dollars are traded on its Aladdin plat- memory, soul or conscience. It is simply the Cape of Good Hope. These were ef- form, which is the equivalent of seven per an idea given substance by its political fectively state controlled mercantile en- cent of all shares held worldwide, through context. It was that context that failed terprises with a remit, and the agency, to 17,000 traders. Black Rock controls five then and continues to fail now. The mod- expand British influence worldwide. per cent of the 20 largest capitalised com- el of economics which is now dominant

communication director 4/2015 87 Issue Focus

can never be really known, but the logic and freedom are closely allied to account- of the neoliberalists is that the market ability, good governance, the rule of law, is the ultimate information system. It is mutuality, and recognition of the intrin- executive summary omnipotent and superior to human intel- sic value and rights of labour and the ligence and should be beyond our control Earth, it fails. • Capitalism is a word because if we dally with it, it will fail Global surveys of trust show that unheard of until the publi- us. The model which espouses freedom people trust NGOs most, followed by cation of Das Kapital by Karl through liberalisation, marketisation, business next and government last, yet Marx in 1860 and was never commodification and objectification has they trust business people least. Indeed, used by the man often cited enslaved us all by quantifying all human paradoxically they blame business peo- as the modern founder of activity as good if measured in financial ple rather than the capitalist system or capitalism, Adam Smith. terms. It would have us trade every tree, corporations for the collapse of global all the Earth’s resources and our love for finances in 2008/9 and think that gov- • T he liberalisations of the one another in worship of the market. ernment should be doing more to control 1980s, driven by Margaret Business and management banking excesses and force business to Thatcher in the UK and Ron- schools have been factories for the pro- be more honest, accountable and trans- ald Reagan in the USA with duction of the managers of profit maxi- parent. the intellectual support of the Chicago School of misation and the growth of the corporate Very few surveys show that people Economics, allowed banks body. And when the private body goes understand the inherent structural im- to create money by creating balances and lunacies of the current credit. In the creation of model of capitalism. This is probably be- credit the banks countered cause they are too complex to be under- their avowed monetarist stood by anyone, and too complicated for public policies which tried most people to begin to understand the to control money supply. “Global surveys minutiae in the flow of money, services and goods around the world. If most chil- • It is not capitalism that is of trust show that dren in advanced democracies think milk normally being discussed, people trust NGOs is made in the back of the supermarket but management and how are most people going to understand governance issues – and most, followed by derivatives, sub primes and collaterals? often nowadays corporate Today we give away our thoughts for social responsibility. business next and free and they are commoditised, for this is how many social media companies like • Corporations have been the government last, yet main vehicle behind the ex- Facebook, Twitter and LinkedIn operate, pansion of global markets they trust business and how modern capitalist corporations and the financialisation of like Amazon, Tesco and Google know people least.” all aspects of our lives. As what, where, how and when you do what such, corporations’ thirst you do. They are watching, overtly and for growth and profits have covertly. We are all entrapped and dis- been largely left unchecked tracted, so we don’t complain. and exert an undue influ- The fundamentals are sound: the rule ence on the everyday lives belly up, the public state (which under of law (or contract), reward for hard work of people. neoliberalism should wither away) is sup- and risk, and retaining the gains of our posed to bail it out, so enmeshed is the hard work and risk which sometimes state with the pursuit of private profit. means property rights. The problems we The triumph of capitalism since 1945 is have to deal with are correcting markets Modern communications technolo- the triumph of freedom, accountability, when they go wrong – because they do, gies combined with the role of finance collective strength, enterprise and inno- dealing with those people who would have made information a key commodi- vation, not the triumph of free markets. seek power and massive wealth over all ty. Economics is now about information In the last 40 years the former has been others through using markets, and the flow. If that is thought of as a flowing closely allied to the latter, but the evi- organs of capitalism: government and river the river is now so fast, vast and dence is that unless markets, enterprise corporations. furious that it cannot be stopped, we can

88 communication director 4/2015 Issue Focus

merely build bigger dykes. In 2008/9 the Colin Mayer says in the book Firm Com- river flooded, threatening to drown us mitment (2013): ”We are trying to control all, but the neoliberal state stepped in the whale by tickling its tale . . . We have and private debt became public debt in seen serious deficiencies in both the deliv- apparent seamlessness. ery of public goods and services, and the To continue the analogy, 75 per cent adherence of corporations to responsi- of the surface of the planet is covered in ble conduct.” Charged with investigating water and so now the world is awash with large French corporations, Norwegian financial capital looking for a return. It’s born French judge Eva Joly said in an Malcolm McIntosh been called the perfect storm. Popula- interview in 2014 that corporations rep- tion grows; wealth creates exponential Griffith BusinessS chool, Aus- resented a ”new form of colonialism”. In resource depletion; and our asocial eco- tralia/Stellenbosch University, a book written in 1992 for the then recent- nomic model relies on growth, resource South Africa ly formed World Business Council for exploitation and money as the root, rath- Sustainable Development (a rival to the er than the servant, of all wealth creation. Malcolm McInstosh is adjunct emerging UN Global Compact) the found- Banks and our corporate entities are the professor at Griffith Business er Stephan Schmidheiney touched on the dominant institutions alongside neces- School in Queensland, Australia core problem with the link between mar- sary but outmoded national models. The and professor extraordinaire kets and corporations: “If markets really greatest challenges to change are the cur- at Stellenbosch Universi- do encourage efficient resource use and rent economic system, nationalism, trib- ty, South Africa. He is also decreases in pollution, then we must ask alism (in which is included religious fun- founding editor of the Journal ourselves why the past record of industri- of Corporate Citizenship and damentalism) and misogyny. The clash alisation is largely one of unsustainable founding director of the Asia of civilisations is between those who resource use and high levels of pollution”. Pacific Centre forS ustainable understand that we have one world with The main vehicle for the expansion of Enterprise at Griffith Business finite resources and limited lifespans, and global markets and the financialisation School as well as of the Applied those who believe in the infinite exploita- Research Centre for Human of all aspects of life has been through the tion of people, planet and resources for Security at Coventry University, corporation, particularly through banks. personal, national or tribal gain. UK. This article is adapted from A corporation, albeit a legal person, Much of European expansionism was Thinking The Twenty-First Cen- cannot knowingly do harm – only its of- predicated on trade and trading compa- tury: Ideas for the New Political ficers can know this and they are merely nies armed with guns and bibles to ‘civ- Economy, published in 2015 by agents for the owners who in most cases ilise’ people and markets. In 1776 – some Greenleaf Publishing. are so distanced as to be over the horizon 40 years before the start of the Industrial and far away. Unless we change the laws Revolution – Adam Smith published The governing incorporation, limited liability Wealth of Nations drawing on both the- and corporate malfeasance corporations, ory and practice around the world. 1820 beyond reckoning – and certainly out of whether they are shareholder or state saw the start of the Industrial Revolution control. The corporation is a legal fiction – owned, will continue to rape and pillage followed rapidly in 1844 by the Joint Stock an extraordinary creation which pretends in their interests just as marauding Vi- Companies Act (UK) and the Limited Li- to mimic the individual when of course it kings and Mongols did centuries before. ability Act (UK) in 1855 (France had been does not have body, soul and mind. Corporations are our servants and op- first a few years earlier in this regard). erate by our rules. It is for us to change The Companies Act (UK) followed in Oc- the rules. Servants Corporations work on market tober 1856 and the modern corporation rules that are in urgent need of updating was born: limited liability, disinterested and masters to make transparent the hidden connec- investment, overseas management, and a tions between how they make money and management class operating for investors. The corporate responsibility in- their social and environmental impact. Since their creation, the corporation dustry, of which I have been a part for This cannot simply be left to laggardly has created more prosperity and misery some 25 years, has attempted to bring public bodies, weak states and citizen’s than could ever be imagined. It has be- the corporation into line by introducing movements: we must change the very come a law unto itself and threatens to eat accountability, governance and reporting operating rules on which corporations us alive. Many global corporations are so measures but these are really only play- survive. •

: Private : Photo large, and so complex, that they are almost ing at the edges. As former UBS director

communication director 4/2015 89 Communication Reader Books content Code breaker

Like most great content, Michael Schaefer’s latest book answers a question on many people’s minds. That question goes something like this: I produce great content and engage across every digital marketing platform known to man, so why is no one reading? Schaefer tackles this question by presenting six key elements to igniting your content code. Schaefer’s style is down to earth and conversational and importantly he provides plain ideas that go straight to the point. Worthy content does not intrinsically gain the widest readership; short term traffic should not csr be the only goal; you must invest time in your audience... there are many Healing more. What gives this book weight is Schaefer’s the rift autobiographical evidence. He has built himself a large readership Corporate social responsibility is a future – that still turns a profit. Having through his concept that was both quick in rising established their expertise in business online presence and previous books. to prominence and in being sullied – nuance in a wide range of contexts in The strategies he outlines come from seen as a feel good façade and often the first half of the book, in the second his journey to develop his own alpha dismissed as greenwashing. Concerned half the authors drive their message audience through quality content and by the rift betwee business and society, home: that is, transparency and engage- engagement. In a time when content former BP chief executive officer John ment with government and societal is in overload, books such as these are Browne has collaborated with two entities is crucial for business. Their worth spending your time with. McKinsey experts and interviewed greatest victory is providing the reader a range of people as he attempts to with hope that such a shift is not only The Content Code: Six Essential redefine corporate social responsibility essential but well within reach. Strategies to Ignite your Con- for a new age. With a palpable need to tent, your Marketing and your reaffirm business as a force for good in Connect: How Companies Business the world, Browne and his co-authors Succeed by Engaging Radically Mark Schaefer, March 2015 Tommy Stadlen and Robin Nuttall with Society offer an invigorating insight into John Browne, Tommy Stadlen how business and wider society can and Robin Nutall, welcome a better, more harmonious WH Allen, September 2015

90 communication director 4/2015 imprint

Senior Editor management Dafydd Phillips

A bitter pill Editorial Team Stefanie Schwerdtfeger, Jan Wisniewski Though this title promises to deliver [email protected] success, it draws much of its content from the managerial failures that Design Sarah Schlingmeyer, Armen Vanetsyan lead to corporate disaster. It is a book of bad case studies that implores the Illustrations reader to learn from the mistakes of Burkhard Piller, Ivan Mata Tamayo others. Evidence for these failures is taken from a wide range of sources: Photo Editors from Plato to Henry Ford to Monty internet Laurin Schmid, Julia Nimke Python. Despite the breadth of material these errors translate perfectly to Future dream Advertising modern business practice and often Helge Schlüter feel all too familiar. In challeng- With the Internet of Things (IoT) [email protected] ing leaders to improve themselves poised to become mainstream, un- Morgen Witzel can be harsh in his derstanding its importance to value Website Melanie Kuhles, Simon Mista lessons. However what works in his creation is set to be a hot topic for favour is his concise and at times communicators in 2016. This could be Publishers darkly humorous prose. He may be the book that provides that under- Rudolf Hetzel, Marc-Oliver Voigt offering a bitter pill but it is one that standing. The professional life of comes with clear-instructions and author Alexander Manu is intrinsi- Subscription a guarantee to improve corporate cally tied to innovation, whether he 120 Euro annually for four editions health. The seven deadly sins of man- is lecturing, writing or guiding some of the print magazine, access to online archives and receipt of agement and the 50 warning flags of of the world’s largest organisations monthly newsletter. Members of impending doom appear through- into new areas for them to transform. the European Association of out the book. Success, we are told, His tight prose presents some large Communication Directors (EACD) receive a subscription to the magazine comes through and challenging ideas about the true as part of their membership. identifying role of technology in motivating our [email protected] these so-called actions. He explains how fulfilling danger signals these motivations is essential to creat- Online www.communication-director.com and avoiding ing value and the significance of this Twitter @codimag arrogance, greed, to our current economic model, the fear, ignorance, behaviour economy. These concepts Printing lust, linear are made clear right from the intro- PieReg Druckcenter Berlin GmbH, thinking and duction highlighting the impact of Benzstraße 12, 12277 Berlin lack of purpose. Google Earth, and revisited repeatedly Witzel genuinely believes in the good as Manu explores how we establish Last words that business leaders can achieve and value. It is a fascinating look beyond “You’re going to make a difference. A lot of times it won’t be huge, it won’t be through a what-not-to-do approach the technical prospects of the IoT visible even. But it will matter just the he provides a disruptive tome for that doubles as an insight into where same” Commissioner James Gordon (Batman) those aspiring to do better. innovation comes from and how we harness technology to chase after it. Managing for Success: Spotting Danger Signals and Value Creation and the Fixing Problems Before they Internet of Things Happen Alexander Manu Morgen Witzel Gower Applied Research, Publisher and editorial address Helios Media GmbH Bloomsbury August 2015 Werderscher Markt 13 April 2015 10117 Berlin Telefon: 030 / 84 85 90 Fax: 030 / 84 85 92 00 [email protected] European Association of Communication Directors

A meeting of

Content minds

92 A meeting of minds The annual Forum meeting of the European The EACD‘s annual Forum event Association of Communication Directors capped took place on November 26 at a busy year for the associaiton – and explored the the headquarters of HSBC in London. timely themes of security and trust.

94 EACD events A review of recent EACD events.

96 he 2015 edition of the to lead such a discussion is, of course, Question to members EACD Forum – the As- the communications director. But what sociation’s annual get-to- is the corporate communicators’ role in How do you help your organisation be a good corporate citizen? gether – took place in a cyber-security crisis? How well are we T the iconic surroundings prepared to deal with data theft? What

97 of Canary Wharf, London, home to the can communicators do to keep customer headquarters of HSBC (together with its trust and maintain stakeholder loyalty New members base in Hong Kong). Following the estab- after a hack? Welcome to EACD! lished procedure of board meeting, working group sessions and panel discussion with invited guests, this year’s event was Protecting a memorable one – and not just because vital assets of the high-powered surroundings. The event’s highlight was a panel These and other questions were ex- discussion centred on the dark side of plored in depth by the event’s panel. the digitisation of our society: cyber- Stefan Rojacher, corporate communica- attacks and hacking. Recent high-pro- tions manager DACH at Kaspersky Lab, file data breaches at JP Morgan or Sony led his team through a highly complex painfully demonstrate that these attacks cyber-attack on Kaspersky Lab known can happen to even the largest compa- as Duqu 2.0, a feat that won his team nies and illustrate the harm caused by the prestigious Goldener Apfel award the loss of customer data. These and as Communications Department of the similar cases have the power to tarnish Year in Berlin in September. Jaya Baloo, corporate reputation as well as pull the chief information security officer at KPN plug on customer trust – which is why Telecom, has completed projects ranging this subject demands urgent discussion from Lawful Interception, Deep Packet in every board room. The perfect person Inspection, VoIP & Mobile Security to de-

92 communication director 4/2015 Association

The EACD Forum 2015 took place in HSBC’s headquarters in Canary Wharf, London

signing national MPLS infrastructures EACD and Working Group Coordinator and ISP architectures. And finally, Roel Philippe Borremans, chief social media van Rijsewijk, partner at Deloitte Nether- officer for the Van Marcke Group, led Jaya Baloo, Chief lands, leads the firm’s Cyber Risk Services a colorful discussion with the EACD’s Information Security practice in the Netherlands and works Social Media Working Group about Officer,K PN Telecom for technology-enabled businesses in the “The Agile PR Team: applying Agile/ field of risk management, compliance, in- Lean and Kanban project management tegrity and corporate responsibility. principles to communication teams and Together, the panel gave valuable operations.” Looking at ways of deliver- tips for how communicators can posi- ing consistent public relations quality Stefan Rojacher, Cor- tion themselves as an important defence to internal clients, without errors and porate Communica- against cyber attacks, and also shared without wasting time or resources, Philip tions Manager DACH, ideas about the kind of preventative and the group brainstormed ideas and Kaspersky Lab strategies that can be employed, which developed applicable take-aways. tools to use to regain lost trust and how Meanwhile, in a nearby room, phi- to best inform employees about data se- losopher and trust consultant Dr Bren- curity and to explain just how easily com- nan Jacoby from the School of Life (yes, puter systems can be exploited: a lesson really: www.theschooloflife.com) spoke we could all do with learning. in front of the EACD’s Health Working Roel van Rijsewijk, Group about the impact of drug scandals Partner, Deloitte on the healthcare industry. Eye-opening Netherlands Agile PR and stuff, and a reminder that, whether on- resilient trust line or offline, trust is one of the communicator’s key reponsibilites. • But that’s not all. In the buildup to the evening’s expert discussion, two work-

kan Dahlström; Private (3) Private Dahlström; Ha kan Photos: ing group meetings ran in parallel. The

communication director 4/2015 93 COMMUNICATION DIRECTOR Review the magazine for corporate communications and public relations

November 5, Frankfurt

November 3, Geneva Building brand through employee Corporate identity and brand reputation DIRECTOR

european issue power COMMUNICATION Number 3/2015 the magazine for corporate communications and public relations www.communication-director.com The magazine for Employer branding has been widely recognised as a brand management and corporate communications communications tool. It is also a strategic function that actually drives outcome. To effectively develop and implement an in Europe employer branding strategy, different fac- Pleased to tors need to be considered: what does our meet you?

target audience value and how to best The strategic art of stakeholder • In-depth articles by senior experts address them? What does it really mean engagement Strange bedfellows Getting • Cross-industry insights and opinions to mobilise and integrate employees? Un- Learning to traction, manage super der the title “Internal communication be- stakeholder being groups believed • Coverage of developments, news and ideas Building partner- coming external – how to increase brand ships through Brand, corporate diplomacy • Interviews with leading professionals awareness through employee brand am- browsing and beyond Driving engagement with bassadors”, these and other aspects were data-driven personalisation • Tips on career development assessed by our expert panel at EACD’s • Online archives, newsletter and more regional debate in Frankfurt am Main. Panellists Anke Maibach, marketing manager central Europe at Tata Consul- tancy Services Deutschland and Martin Camphausen, head of corporate commu- Written by communication leaders for communication leaders, Communication Director provides nications and spokesperson at Frank- exclusive insights into corporate communications and public affairs. furter Rotkreuz-Kliniken e.V., as well as Swiss Group discusses the ROI of integrated communications moderator Claudia Wagner agreed that cross functional collaboration, especially Communications is considered by tor, EMEA; Richard Northcote, member between the HR, marketing and commu- many as a support function that is meas- of the executive committee, global com- nications functions, is essential. Organ- Subscribe now International fax +32 / 22192292 ured by activity output, namely the num- munications, public affairs and sustaina- isations should be aware that motivat- ber of press releases issued and retweets bility director at Bayer Material Sciences; ed, enthusiastic employees are the best I want to subscribe to Communication Director magazine (4 issues per year). achieved. It is not always considered as and Inge Van Halst, partner at Visual- brand ambassadors in terms of voice and COMMUNICATION DIRECTOR a strategic function that drives outcome ising Value. Together, the panel agreed image. Without their buy-in you will not Standard (120 euros per year) Trial subscription (1 issue, no charge) and makes a difference in market share that it takes courage, boldness and risk succeed. As a conclusion our speakers gain through reputation building and taking to get a seat on the board. emphasised that employer branding is a Name, Surname*: strategic positioning. The panel stressed that communica- long-term initiative. Once you’ve started, Company: To address this problem and to dis- tors should embed metrics that reflect you cannot go back to zero. • cuss how communicators can secure a the impact of communications on the Private Photo: Street*: Town/City, Postcode*: seat at the board table, our Swiss region- top and bottom line of the company. The Telephone: E-Mail*: al group met at DuPont in Geneva. The communications function should move Helios Media event’s panellists were: Hanane Taidi, from a cost to a profit centre by putting a Join communications peers Date: Signature Werderscher Markt 13 EMEA marketing and communications value on the reputation of the company. across Europe today at D-10117 Berlin * Mandatory leader at DuPont Performance Polymers; Moreover, communicators should edu- http://www.eacd-online.eu/mem- Germany Eduardo Menchaca, DuPont corporate cate management and colleagues about bership/join-eacd Tel + 49 (0) 30 / 84 85 90 The subscription is valid for a period of at least 12 months after the contract. Fax + 49 (0) 30 / 84 85 92 00 communications and public affairs direc- the strategic role of communications. The subscription is automatically renewed unless written notice is received at least 3 months before the end of the 12 months. • The trial subscription can be cancelled in writing within 14 days of receipt of the first issue. [email protected] If the termination of the trial subscription is not received within this period, it automatically switches to an annual subscription. www.helios-media.com

94 communication director 4/2015 www.communication-director.com COMMUNICATION DIRECTORAssociation the magazine for corporate communications and public relations

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european issue COMMUNICATION Number 3/2015 the magazine for corporate communications and public relations www.communication-director.com The magazine for corporate communications in Europe Pleased to meet you?

The strategic art of stakeholder • In-depth articles by senior experts engagement Strange bedfellows • Cross-industry insights and opinions Getting Learning to traction, manage super stakeholder being groups believed • Coverage of developments, news and ideas Building partnerships through Brand, corporate diplomacy • Interviews with leading professionals browsing and beyond Driving engagement with data-driven personalisation • Tips on career development • Online archives, newsletter and more

Written by communication leaders for communication leaders, Communication Director provides exclusive insights into corporate communications and public affairs.

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communication director 4/2015 95 www.communication-director.com Question to members How do you help your organisation be a good corporate citizen?

It is a fact today that all Companies have the social Both “corporate” and “citizen” businesses need to be con- responsibility to make profit, are terms that include the scious about its responsi- because it sustains jobs, tax concept of belonging. We all bilities and its role in the society. It’s revenues and economies. When it comes belong to different groups like family not enough to create jobs, sell good to corporate citizenship, the profit and friends, work and countries. The products and sponsor an exemplary model extends the economic value to awakening of the human global con- NGO. However, how you behave as an the internal and external stakehold- sciousness should change the belonging organisation and the transparency of ers of the company, too. This needs a concept in corporate citizenship, so that your communications are crucial. To be shift in mindset, because it means that corporations have a global citizen con- a model corporate business has above companies must pursue strategic busi- science. Soon enough we will be talking all to do with the way business itself ness models that create added value to about business sustainability, because is run. Reality counts and we cannot them, to employees, the industries they that’s what corporate citizenship ought communicate something that does not serve and society. The communication to be. If you are responsible for a busi- exist. Communications are not about function can have an instrumental role ness you want to make it grow, expand manipulation, but about sending real in business by nurturing the process and increase your revenue. A business messages concerning our business. This of becoming a model corporate citizen. model can only thrive if set up in a rule bring us back to the basics: we shall Communications can inspire leadership sustainable fashion. Environmentally not say something that we are not. In an with the perspective of what matters to friendly is not a PR matter, it is a way of interconnected world, there is an even stakeholder groups, whose support can ensuring your business plan will sustain stronger need to stick to the truth. Rep- greatly help a company achieve its busi- itself. A global conscience is developing utation must reflect what you are, not ness objectives. It can enable a platform whereby human kind acknowledges we what you want to be. The “how” factor for dialogue with key stakeholders, e.g. are all crew on spaceship earth – con- shall never be underestimated. That is employees, policy makers and value scious that our daily options transform what can bring you closer to the best of chain players. Finally, it can nurture our world. attract to our lives the good yourself and to a sustainable corporate a model corporate citizen example by we wish to see. This starts with our dai- performance, which will be reflected in frequently informing and engaging with ly decisions, which influence others and your company’s reputation.” stakeholders.” the world around us. Everyone wants the best, and the best is sustainable.” Private (3) Private Carolina Thiede, PR and Communications, Aline Stanworth, Communications Leader

SES SatellitesSupervisor Europe, Innovative Plastics SBU, SABIC Rui Veras, Communications Officer, Photos: International Water Association

96 communication director 4/2015 Association New members Welcome!

The following communicators have recently joined the EACD

Anneli Aab, Head of Communi- Ester Kim, Regional Communi- Carolina Thiede, Communica- cation Uni, Foundation Innove cations and Engagement Leader, tions Specialist, SES S.A. Foteini Bampanara, Head of Ernst & Young GmbH Julia Tisserant, Corporate Com- Communications, Novartis Ildiko Kovacs, Head of Locations munications Manager, Eaton Hellas SA Communications Tire Division, Industries Manufacturing GmbH Liz Carlile, Director of Commu- Continental Reifen Deutschland Erhan Ustundag, Corporate nications, International Institute GmbH Communications Manager, TAV for Environment and Develop- Silvia Labé, Director of Com- Airports ment munications and Institutional Rui Veras, Communications Laurence Chiapponi, Senior PR Relations, Biocat Officer, International Water Advisor, Sodexo SA Jacques Lovell, European Association Andreas Christen, Social Media Advocacy Adviser, European Elisaveta Vladova, Communicati- Manager, Amnesty International Broadcasting Union on Officer, Bayer Bulgaria EOOD Simonetta Esposito, Global Sanja Lubardic, PR and Commu- Linda Wallace, Director of Com- Communications Manager, nications Director, NIS a.d. Novi munications, Innovate UK Tenneco Inc. Sad Claudia Wallner, Leiterin Unter- José Faria Machado, Communi- Pia Lykke, Press Officer, Land- nehmenskommunikation, Hilti cations Manager, Bayer Portugal brug & Fødevarer Deutschland AG S.A. Julia Öberg, Press Officer, Euro- Christoph Zemelka, Senior Vice Bijan Farnoudi, Head of pean Spallation Source President Corporate Commu- Communications, Kofi Annan Katie Owens, Press & Commu- nications, Brand Management, Foundation nication Officer, Group in the and Sustainability, Robert Bosch Riccardo Fava, Director Investor Committee of the Regions GmbH Relations & Corporate Commu- Valérie Rampi, Advocacy and nication, DiaSorin SpA Communications Manager, Euro- Maryna Fomenko, Head of PR, pean Chemical Industry Council Astapov Lawyers James Ramsay, Head of External Pia Friberg, Director Commu- Relations Unit, European Food nications Operations, Commu- Safety Authority nications & Branding, Wärtsilä Clara Rodrigo, Deputy Head of Corporation Communications and Corporate William Garnier, Director of Responsibility, AXA Mediterrane- Communications, Outreach and an and Latin America Region Education, SKA Organisation Aparecido Silveira, Marketing Irina P. Guschchina, Public Af- Communications EMEA, Dupont fairs Director, Abbott Laborato- Nutrition & Health ries Russia Liz Smith, VP Global Internal Dana Hasana, Head of Com- Communications, Elsevier Join communications peers across Europe today at muni- Limited http://www.eacd-online.eu/membership/join-eacd cation, AS Latvijas Balzams Aline Stanworth, Communica- Markku Samuli Herrala, Director tion Leader Europe, Engineering Stakeholder Relations, Resins, Innovative Plastics, SABIC UPM-Kymmene Wood Oy Innovative Plastics Holding BV Trevor Holmes, VP External & Ina Stumpe Douffiagues, Head Strategic Affairs, Dublin City of Communications, LITASCO SA University

communication director 4/2015 97 Questions to Always forward, never backward The best thing about my job is… A piece of music I can’t live with- that every day is different and no routine. out is … the music played by my children: You can never know when something un- a 12-year old daughter and a 10-year old expected will happen and the media will son. They play the piano and the guitar. start trumpeting about it. And if any- It’s never silent in our family: somebody thing happens in the area you work in, plays, somebody sings, somebody talks Lina Jakučionien you will have to respond to it right away, loudly. And this is the most beautiful and Director of Corporate putting aside anything you had planned incomparable piece of music to me. Communication, ERGO Baltic before. People who like comfort and sta- States bility cannot do this type of job. But I I would describe the communica- myself enjoy this continuous running. tions landscape in the Baltic States as… unique. Three countries, three languages, The worst thing about my job is… three different cultures but one goal – to pointing fingers. No matter how, when, do everything excellently. While heading why and what you communicate, there the communication department for the will always be situations where fingers three Baltic countries, I have understood will be pointed at the communication that it is possible to work together if there team. I often remember the phrase I is tolerance for cultural differences and learnt at university: “If a company is humour. It is no secret that the Baltic praised, this means that its manager is countries have created funny stories doing a good job, but if a company is criti- about one another. For example, “asap” cised, this means that its communication is perceived differently even within my team is doing a bad job”. communication team. Latvians and Lith- uanians understand that an “asap” task If heads of communication didn’t means that it has to be done in an expedi- exist I would work as… a moderator. ent manner, meanwhile, Estonians tend When I was a child, I had two dreams. One to carefully think everything over and of them was to become a bus ticket seller. then act (as we say, measure 10 times and Lina Jakučionien has 15 years’ My mother was a teacher of the Lithuani- cut the eleventh). However, this does not experience in the communica- an language and would bring home piles prevent us from achieving results. tions field, both internal and of essays for correction. Up to the present external, as well as interna- day she doesn’t know that I used a page My dream holiday destination is… tional communication. Lina has from one of these essays to create ‘tickets’. India. I travelled there just before the eco- been the director of corporate communication at ERGO in the The second dream was to moderate events. nomic crisis. When I returned, I could not Baltic States since 2009. Before When I was small I would imagine that understand the people who were com- joining ERGO, she worked as my hair brush was a microphone and my plaining and saying that everything was chief executive officer of the grandmother was the massive audience. terribly bad because of the state of the public institution European The latter dream came true – I often hap- economy. Innovation Projects and chief pen to conduct events. executive officer of theEI P The best piece of advice I ever re- Communication. Prior to that, The books I have on my bedside- ceived is… “everything passes”. This helps head of public relations at table… the Bible. People often want to when you are facing challenges. If you the Ministry of Health of the find answers to various questions. This think about the meaning of this saying, Republic of Lithuania. Lina has book can give you answers to many of your lips and heart start smiling. You lift also worked in the German your questions. your head up high and go ahead. Always Parliament and the European Parliament in Brussels. forward and never backward! • Private Photo:

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