Tag Archive: Edelman Trust Barometer


“We got the bubble headed bleached blonde;  Comes on at five.  She can tell you ’bout the plane crash with a gleam in her eye.  It’s interesting when people die;  Give us dirty laundry.”  —  Don Henley, Dirty Laundry, 1982

Big Government is broken.

The same is true with Big Media.bigmedia

The decline of legacy media – newspapers, magazines, television and radio – has been well documented.

The corresponding rise of digital native media – social media, blogs, news aggregators – has also been covered to death, including by Almost DailyBrett.

What is gaining increased traction is the loss of trust in Big Media – major newspaper mastheads (i.e., New York Times, Washington Post, USA Today, Wall Street Journal), Big Three networks, cable news – as evidenced by the latest Gallup survey of 1,025 results, hailing from all 50 states with a 95 percent confidence level with a scientifically valid margin-of-error of plus or minus 4 percent.

The Gallup results are stunning: Only four-out-of-every 10 Americans have a great deal or fair trust and confidence in the media to report the news fully, fairly and accurately. Translated six-out-of-every 10 Americans have expressed a vote of no-confidence in the media.

In 1998 just 17 years ago, 55 percent had a great-to-fair confidence in the media. Today that number is down to 40 percent … well outside of the margin of error. Yes, the decline is precipitous and real.

Among younger Americans (18-49), the trust and confidence level in media is only 36 percent. There also exists a major gap between Democrats, whose trust fell to a 14-year low of 54 percent. Only 32 percent of Republicans express great-to-fair confidence in Big Media.

Gallup pointed to the former NBC anchor Brian Williams caper in which the celebrated anchor embellished on his experiences including being hit while covering the Iraq invasion in 2003 as the canary in the mine as it applies to the media’s loss of confidence.williamssorrydude

Not mentioned by Gallup was the totally fabricated and subsequently retracted “A Rape on Campus” by Rolling Stone.

The Gallup results effectively validate the 2015 Edelman Trust Barometer, which reported a continued decline in trust in media from 53 percent in 2014 to 51 percent in 2015. The eye-raising result was how 72 percent of Millennials gravitate first and foremost to search engines for breaking news and information.

And you wonder why Time Magazine is suffering from anorexia? And what happened to Newsweek, Seattle Post-Intelligencer and the Rocky Mountain News? Which traditional media outlet will be the next to bite the dust?

The media, which celebrates throwing digital, broadcast and printed rocks at the high and mighty, is under assault. What is the answer?

Maybe Big Media needs help from the “Dark Side”? Yes, Big Media needs better public relations … pronto.

An Adversary In Need of An Adversary?

Reporters leaving the profession to enter the growing ranks of public relations pros (flacks if you prefer) have quickly been labeled as joining the “dark side.” The premise is one is saying goodbye to objectivity and selling her or his soul to become an advocate. This transition was a career defining choice for the author of Almost DailyBrett.

Despite the animosity, media needs public relations pros for news and information. In turn, the PR pros need media – whether it be legacy or digital native – to get out their messages to stakeholders. In effect, they are friendly adversaries.

Now it seems that Big Media needs PR counsel … yes from those very same flacks and spin doctors newspapers, broadcast, news aggregators, bloggers etc. so despise.

Quite simply, Big Media has an unprecedented crisis of public confidence. Big Media relishes in setting the agenda for how we are supposed to think and what we are supposed to think about. Doesn’t this assumption of this precious responsibility strike you as being a tad … arrogant?

And what about the notion of media elites and how they are there for you … always for you? Brian Williams was on the front lines … even when he wasn’t. Dan Rather wore traditional Afghani robes and became Gunga Dan. He was also part of the celebrated caper involving forged documents, exposed by bloggers, purporting that President George W. Bush received favorable National Guard treatment in 1972. Both Brian and Dan permanently lost their anchors chairs at NBC and CBS respectively.cbs2

There is also the issue of the media elites learning to the left with the notable exceptions of Fox News and the Wall Street Journal. They piously declare the obvious is not true, even though the massive evidence points the other way. Do you really think it was a wise idea to donate $75,000 to the Clinton Foundation fair-and-balanced George Stephanopoulos of ABC News? And let’s not forget the $600,000 per year paid by NBC News to Chelsea Clinton for four reports.

Let’s face it: It will be a long-and-hard fight for Big Media to restore the trust and confidence of the American people.

Maybe the answer lies with the word, objectivity. How about a systematic effort backed by actual level-playing-field reporting – not just sanctimonious pronouncements of being fair and balanced – that begins the multi-year effort to prove that Big Media gets it when it comes to its obvious perception problems? The Economist continues to thrive namely because it is intelligent and equally offends those on both the left and right.

Most of all how about a little humility? Do you think that is possible, particularly those that occupy the Big Anchor positions in God’s Time Zone (e.g., EDT)?

Naaahhhhh!!!!

http://money.cnn.com/2015/09/30/media/media-trust-americans/index.html

http://www.gallup.com/poll/185927/americans-trust-media-remains-historical-low.aspx

http://www.scribd.com/doc/252750985/2015-Edelman-Trust-Barometer-Executive-Summary

https://almostdailybrett.wordpress.com/2015/05/14/75000-in-charitable-donations-or-massive-conflict-of-interest/

https://almostdailybrett.wordpress.com/2014/06/22/chelseas-nbc-600k-tv-gig-and-aspiring-journalists/

 

 

 

Why, oh why do these things happen to me?” — Rabbit

Their cups are always half-empty.

halfempty

They don’t understand, Goldilocks. Never will anything be quite right.

When they were kids, their favorite Winnie the Pooh characters were either Eeyore or Rabbit, when once again he was lamenting his state of life.

They are known as “Gloomy Gus” or “Negative Nancy” in the workplace.

And please, o’ please … never put them in charge of managing people.

The reason? Whatever is accomplished is never good enough, and whatever subordinate shortcomings are exhibited become highlighted and immediately pounced upon.

These people are downers, the Human Barbiturates.

Human Barbiturates vs. Clinical Depression

The right-brain author of Almost DailyBrett thankfully will never be confused with a highly degreed-psychologist.

Based upon limited reading, it seems that clinical depression is characterized by episodes and inflicts a certain percentage of the population for a particular period of time. It can be and is treated. Hopefully, these people can return to healthy and happy lives.

Human Barbiturates are always in a down mood, regardless of the circumstances. If an organization is run like a business, they are unhappy. If the very same organization is governed by a labor friendly collective bargaining agreement, they are equally bummed out.

In fact, they are always bummed out. Nothing is right. Nothing will ever be right. If you don’t believe me, just ask them.

barbituates

Why is the presence of Human Barbiturates a matter of concern? Why should any blog focused on communications choreography even care about these homo-sapien downers?

The reason is these individuals can become a cancer within an organization, dragging anybody and everybody who comes into contact with them into the abyss.

No PR pro in her or his right mind would put these poor sods in a front-man role, serving as the point of entry for critical stakeholders. Naturally, they should be buried in any organization. That is not to say that they can’t still cause damage.

Let’s pretend you are running employee communications for a privately held or publicly traded corporation. Your job is to use conventional and digital tools to promote morale. Your job is just that much tougher if Gloomy Gus or Negative Nancy is undermining your story, and with it management, at the water cooler.

Don’t try to satisfy the Human Barbiturates because you can’t. These people really need a new start, but keep in mind they will spread their human Valium to another organization. At least they will be someone else’s problem.

Gloomy Gus or Negative Nancy As Your Boss?

“Never wait or hesitate Get in kid, before it’s too late You may never get another chance ‘Cos youth a mask but it don’t last live it long and live it fast” – Rod Stewart, The Killing of Georgie, Part I and II

You know instinctively that life is short. You want to live out your days and nights with as much gusto as you can.

Except you have a Human Barbiturate as a boss, or to be more precise, a bosshole.

bosshole

The Edelman Trust Barometer has consistently reported that “informed publics” around the globe are more willing to do business with companies that treat their employees with dignity and respect. It stands to reason that enlightened management would never turn over supervisorial decisions to Human Barbiturates.

Can employees ever satisfy those who will never be satisfied? You know the answer.

If Human Barbiturates always bitch, moan, whine and complain in the break room, texting and emailing, their behavior is compounded and magnified if they are selected for managerial positions.

Let’s just make the call here and now: Human Barbiturates should never be assigned to the management of people.

They should never be the face of any organization.

If hired, their talent must clearly outweigh their potential negative influence on an organization’s morale.

Otherwise, they are nothing more and nothing less than downers that become the subject of behind-the-back conversation, and maybe even ridicule.

When it comes to Human Barbiturates, it’s best for an organization to “Just Say, ‘No.'”

http://en.wikipedia.org/wiki/Barbiturate

http://www.youtube.com/watch?v=fTYcu4CJbA8

http://en.wikipedia.org/wiki/The_Story_of_the_Three_Bears

http://www.azlyrics.com/lyrics/rodstewart/thekillingofgeorgiepartiandii.html

http://www.webmd.com/depression/guide/major-depression

http://www.edelman.com/insights/intellectual-property/2014-edelman-trust-barometer/

 

 

Celebrate, Not Just Tolerate

“Go where you are celebrated, not merely tolerated.” – Paul F. Davis, motivational speaker and life coach.

Davis also said: “If you don’t feel it, flee from it.”

pauldavis

Aren’t these quotes diametrically opposed to the legendary: “Winners never quit, quitters never win”?

The answer is affirmative, but so what? Life is simply too short.

As the stubborn economic downturn moves from year-seven into year-eight, there remains a tremendous amount of emphasis on the officially unemployed, 10.9 million; underemployed. 7.7 million (e.g., part-time jobs with no benefits); and to those who simply gave up the fight to find a job, 762,000.

That’s nearly 20 million Americans, if you are scoring at home.

There are millions more who are literally trapped in lousy jobs (a large percentage of 43.8 percent of the nation that make up the total working population). Some of these workers are in dead-end positions. Some are under the thumb of authoritative bossholes. And even more may be sent packing in the next reduction in force (RIF), downsizing, rightsizing, duplication-elimination exercise, restructuring or whatever pleasant term you want to attach to the elimination of jobs.

edelmantrust

There is also the question whether employers, who have taken their employees for granted and/or treated them miserably, fully understand the consequences of their totalitarian behavior. For example, the Edelman Trust Barometer once again in 2013 revealed the public is more inclined to trust businesses, patronize their stores and purchase their products that have a track record of treating their employees well.

Quiz: What is one of the first things that come into mind when you think of Walmart? Low prices? How about the widespread perception that the retail giant is less than generous with its 2.2 million employees or associates in Bentonville-ese.

walmartemployees

The $474.8 billion world’s largest publicly traded company (NYSE: WMT) has even sponsored a food drive asking its associates to assist other less-fortunate associates make ends meet for the holidays. Talk about a public relations disaster. How do you make lemonade out of lemons on this one?

Almost DailyBrett opined repeatedly that all recessions/downturns/economic funks eventually come to an end. The Laws of Economics with their cyclical natures simply do not go away.

What does this mean for today’s employer despots? It means that “retention” will someday (it’s coming, trust me) become a scary word. Think of the start of the Indy 500 with the pace car heading off the track and the green flag flying as their free-at-last, Oh God their-free-at-last employees head for the exits to the siren call of the recruiter cherry pickers.

These employees will indeed go where they are celebrated or at least where they believe they will be celebrated.

The hardest questions to answer in this discussion are how much longer will it be before the coming economic upswing? Even tougher to answer is whether a barely tolerated underutilized and underappreciated contributor should just wait for better days or should she or he seek out right now that opportunity to be celebrated?

Clearly, there are hundreds of thousands who are not “feeling it” when it comes to their present state of affairs. Should they flee?

The easy answer is, “yes,” but sometimes pulling off that feat in the face of kids in school, spouse with a job in town, underwater mortgage, not enough other opportunities make fleeing risky and problematic. Keep in mind if one stays and is laid off, change is at hand whether wanted or not.

As a Type A personality, who is perpetually proactive, I believe in always being prepared, keeping on the lookout for opportunities to be celebrated, and more importantly to be respected. Think of it another way: No Guts, No Glory.

eagle

We have discussed before the wisdom of an up-to-date resume, a complete LinkedIn profile that sells your story, and a digital network of former superiors, subordinates, and present colleagues, partners and friends who are ready and willing to help.

There is also the need to Google (corporate verb) yourself and appreciate what others are potentially reading about you, and conceivably what is being said and illustrated by people around the world who coincidentally share your name.

This is the time to take every step conceivable to protect your reputation and to manage the most important brand on the planet: Your personal brand.

As you come to the end of 2013 and look toward 2014, you don’t have to put up with bad behavior. You deserve the best that life has to offer. You are only here once. Go out and be celebrated before it is too late.

http://followpics.net/if-you-dont-feel-it-flee-from-it-go-where-you-are-celebrated-not-merely-tolerated/

http://www.goodreads.com/quotes/126432-if-you-don-t-feel-it-flee-from-it-go-where

http://www.paulfdavis.com/

http://www.gallup.com/poll/125639/gallup-daily-workforce.aspx

http://www.bls.gov/news.release/empsit.nr0.htm

http://www.edelman.com/insights/intellectual-property/trust-2013/

http://www.edelman.com/post/earning-consumer-trust/

http://business.time.com/2013/11/18/walmart-seeks-food-donations-to-help-needy-employees/

 

“Dear applicant,”

I could have called you and I chose not to.” — Comedian Jerry Seinfeld on the growing use of texting and emails to deliver unpleasant news

There was always bad news, and even a glimmer of good news, with the traditional “Dear John” letter.

The bad news was obvious: Your relationship with a particular mademoiselle or madame was finis.

dearjohn

The good news was at least she knew your name and she took the time to pen a note and let you know the final score, even if she did not want to tell you in person or over the phone.

You can’t say the same about a Dear applicant email sent robotically and clinically by a secretary on behalf of someone important with that special extra tender touch in which applicant (that would be you) is spelled in lower case.

It’s even more special if its sent the day before Thanksgiving.

Kind of makes you feel all warm and fuzzy inside.

Almost DailyBrett has commented before about how digital technology (e.g., Web 2.0), despite its ubiquitous nature and 24/7/365 worldwide communication capabilities, has in many respects made it easier for organizations to deliver unwanted messages without any splash back.

As the global economic malaise stretches into its seventh year (when will this funk be over?) with stubborn high-single digit/low-double digit unemployment and underemployment percentages, more-and-more qualified (and overqualified) individuals are competing for what seems to be fewer-and-fewer positions.

Naturally, cool superstars with lofty market values (e.g., Google, Nike, Amazon, Apple, Facebook…) are overwhelmed by thousands of cover letters and resumes. Their respective Catberts (e.g., Human Resources Departments) cannot respond to every one of these applications.

The problem is solved by automatically generated acknowledgement emails, immediately lowering the hopes of the applicant, setting the expectation that only the best and the brightest will be contacted for interviews. Fair enough.

But what happens when the applicant hails from inside the organization? What happens when the applicant is actually encouraged to apply? What happens when an applicant has spent eight hours or longer running a gauntlet of interviews from the mail-room dude to the CEO, followed by the obligatory thank you notes, and knows that she or he is a finalist for the brass ring?

These questions are magnified in cases in which applicants literally expended hours preparing targeted cover letters, updating CVs, securing reference letters and developing online or hard copy portfolios of work.

All of the above are the price for competing and (hopefully) securing high five-figure or six-figure positions in today’s economy.

After all of this effort and more on the part of the job seeker, is a terse Dear applicant kiss-off email from the executive secretary, appropriate?

Wouldn’t you rather receive the equivalent of a Dear John (or substitute your own name), particularly from the hiring manager, instead?

Of course you would.

The next question that comes to mind is: What does the terse digital Dear applicant message say about the organization (e.g., corporations, agencies, non-profits, college or university departments) that treats job seekers this way?

Almost DailyBrett opines that no one naturally wants to hear bad news. This is human nature and to be expected. More importantly, people want to be treated in a straight forward manner. Most of all, they want in the words of the legendary Aretha Franklin to be R-E-S-P-E-C-T-ed.

The Dear applicant diss speaks volumes about the organization. It projects arrogance. It signals coldness. It conveys callousness. Come to think of it, does the job seeker really want to work for this organization? Is the hiring manager really a bosshole?

The Edelman Trust Barometer has repeatedly reported that people are more willing to do business with companies that treat their employees well. That conceivably also applies to those who seek employment with a given company.

“Never play with the feelings of others because you may win the game, but the risk is that you will surely lose the person for a lifetime.” – attributed to Shakespeare.

And what about that poor sap, Teddy Roosevelt’s Man in the Arena who competed to the best of her or his ability, only to receive a “Dear applicant” message?

That person most likely will neither forget nor forgive. That person could have been a future customer. That person could have been a major donor. That person could have a form of hegemony over the Dear applicant organization. The organization could have kept that person on a first-name basis. Instead the organization burned a bridge, and for what purpose?

execsecy

The Dear applicant epistle sent from an executive secretary, who could care less, is without any conceivable doubt bad public relations, poor reputation management and atrocious brand management all in one.

These walk-the-extra-mile applicants deserve personal recognition, respect and to be treated with dignity, not a careless boilerplate message.

What is the old saying: “What goes around comes around?”

Some very wise person said that once, maybe even one who received a Dear applicant kiss-off.

http://en.wikipedia.org/wiki/Dear_John_letter

http://www.urbandictionary.com/define.php?term=Dear%20John%20Letter

http://www.wikihow.com/Write-a-Dear-John-Letter

http://en.wikipedia.org/wiki/Aretha_Franklin

http://www.edelman.com/insights/intellectual-property/trust-2013/

https://almostdailybrett.wordpress.com/2011/03/28/losing-the-art-of-verbal-confrontation/

http://www.edelman.com/post/rebuilding-trust-through-employee-engagement/

http://www.billoreilly.com/video?chartID=610&vid=-686347981610326466

Executives are hired to maximize profits; that is their responsibility to their company’s shareholders. Even if executives wanted to forgo some profit to benefit society, they could expect to lose their jobs if they tried—and be replaced by managers who would restore profit as the top priority,” — Arneel Karnani, University of Michigan associate professor of strategy, Wall Street Journal, August 23, 2010.

“…It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self-interest.” – Adam Smith, author of The Wealth of Nations.

Right now, the public is more likely to view greed as a deadly sin than an engine of economic growth,” Edward Glaeser, Harvard Economist, New York Times, January 6, 2009.

When push comes to shove, are corporate executives (especially at the C-level) more inclined to worship at the altar of fiduciary responsibility as opposed to corporate social responsibility (CSR)?

And conversely are public relations practitioners more inclined to counsel corporate social responsibility over fiduciary responsibility to these very same executives? And if so, is there a disconnect to the detriment of the corporate communicator? Is this a primary reason there are not more seats at corporate boardroom tables for PR pros?

The debate between fiduciary responsibility (maximizing profitability for investing shareholders) vs. corporate social responsibility (doing good deeds benefitting stakeholders in places where a company does business) is not new.

Nobel Prize winning American economist and academic Milton Friedman (1912-2006) took a Kantian stance (categorical imperative) toward a publicly traded company maintaining its fiduciary responsibility to its shareholders in his oft-quoted New York Times Magazine piece in 1970. Friedman said: “…A corporate executive is an employee of the owners of the business. He has direct re­sponsibility to his employers. That responsi­bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con­forming to the basic rules of the society.”

Echoing these sentiments is Harvard professor and former Treasury Secretary Lawrence Summers who stated: “It is hard in this world to do well. It is hard to do good. When I hear a claim that an institution is going to do both, I reach for my wallet. You should too.”

Summers

Besides the Friedman Doctrine, there is the matter of law that is directly applicable when it comes to striving for profitability. The federal Employee Retirement Income Security Act (ERISA) of 1974 was passed to protect the retirement assets of Americans.

Specifically, the law defines a “fiduciary as anyone who exercises discretionary authority or control over a plan’s management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.” Considering that the overwhelming majority of securities are owned by institutional investors (buy-side and sell-side analysts purchasing stocks for retirement funds and big-ticket clients among others), the implied threat of regulatory action and/or liability to plaintiff strike suits aimed at deep pockets is obvious.

Also coming into play is the Nexus of Contracts Theory that posits that corporations are essentially a series of contractual obligations with stakeholders, such as the shareholders who provide capital (market capitalization or market value) to publicly traded companies in return for a potential monetary gain. Kenneth Ayotte and Henry Hansmann in their 2011 A Nexus of Contracts Theory and Legal Entities contend that a firm’s most valuable rights are its contractual assets. The question is whether a company can ethically risk running afoul of these contractual obligations in the pursuit of a higher public good?

Arneel Karnani, University of Michigan associate professor of strategy, is more aligned with Friedman than the growing movement toward CSR, particularly among the practitioners in the public relations community.  In his 2010 Wall Street Journal commentary, The Case Against Social Responsibility, Karnani states categorically that when push comes to shove executives with regularity will come down on the side of fiduciary responsibility for their shareholders and equity-holding employees. To do so otherwise, potentially impacts executive compensation, invites the eventual removal of the chief executive officer and chief lieutenants, prompts ERISA enforcement, and spurs almost certain litigation by the plaintiff’s bar on behalf of alleged aggrieved shareholders.

Fiduciary, imperative “must;” CSR, subjunctive, “should?”

The specter of these very real risks does not mean that CSR is not a factor in today’s boardrooms, even though Karnani uses the categorical words, “irrelevant or ineffective.” Karnani does acknowledge that the prospect of imposed additional costs—regulatory mandates, taxes, punitive fines, public embarrassment—on socially unacceptable behavior (see  2010 BP “Deepwater Horizon” debacle) can drive corporate executives to be at least mindful of CSR.

Karnani cites the global movement toward more fuel-efficient vehicles or healthier fast foods as being driven more out of consideration for profits (e.g. Toyota and McDonald’s respectively)  than a desire to reduce energy consumption and promote healthy diets. J.D. Margolis et al in their 2007 Does It Pay to Be Good? uses the anecdote of Home Depot building playgrounds as more of an effort to stimulate “Corporate Financial Performance” (CFP) as to demonstrate “Corporate Social Performance” (CSP).

According to these authors, all of these CSR activities are direct offshoots of the quest for profits and the maximization of shareholder value.  For example, Karnani said that pleas for corporate social responsibility will only be accepted by executives smart enough to realize that doing the right thing directly coincides with the pursuit of profit. “Pleas for corporate social responsibility will be truly embraced only by those executives who are smart enough to see that doing the right thing is a byproduct of their pursuit of profit,” Karnani wrote.

There is no argument about the mandated fiduciary obligation of publicly traded companies to maximize profits within the context of applicable laws and regulations for the benefit of their investing shareholders. Having said that, just blindly adopting Friedman’s deontological approach in rejecting CSR or Karnani’s skepticism ignore significant global trends in favor of Corporate Social Responsibility.

The Tide Turns?

Professor Charles W.L. Hill in his 2011 seventh edition of Global Business Today defined CSR as the idea that business executives should carefully consider the social consequences of economic actions when making business decisions. CSR advocates contend that businesses, particularly large multi-national enterprises (MNEs), need to recognize their noblesse oblige (Hill’s emphasis) and actually give back to the societies that make their economic success possible. Is this an Utilitarian approach, if shareholders do not receive the ultimate maximum financial return as a result of an increased emphasis on CSR?

Henry Mintzberg et al in their 2002 essay Beyond Selfishness argued that the terrorist attacks on Sept. 11, 2001 (at least for a short-period of time) changed the prevailing thinking of Wall Street denizens to actually consider engaging with society. Before the hijacked planes struck the World Trade Center towers and the Pentagon, the overwhelming focus was on the Internet bubble of the 1990s and the Enron-era rapid acquisition (“irrational exuberance” in the words of Alan Greenspan) of capital. “A society devoid of selfishness is certainly difficult to imagine. But a society that glorifies selfishness can be imagined only as base.”

One very clear trend in favor of CSR is the growing global respect for non-governmental organizations (increasingly seen as independent third-parties). Public esteem and trust for these NGOs has steadily increased. For example, the 2011 Edelman Trust Barometer revealed that not only are NGOs the most trusted in society, but their level of popular support is growing from 57 percent in 2010 to 61 percent in 2011. Certainly, the increasing public trust in these NGOs has prompted companies (e.g.Starbucks) to enter into “synergistic” relationships with these non-profits, such as Conservation International and the Environmental Defense Fund.

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The Edelman Trust Barometer reported that trust in business as measured by a quantitative survey of more than 5,000 “informed publics” grew marginally worldwide from 54-to-56 percent between 2010 and 2011, but actually declined in the US from 54- to-46 percent, and in the UK from 49-to-44 percent. Business trails NGOs in trust, but still leads the media, which only saw its trust score rise from 45-to-49 percent between 2010 and 2011.

The Edelman survey illustrated the stark difference when it comes to public benefit of the doubt between a company that is seen as trustworthy and one that is not. If a company is distrusted then it only takes on average only one-or-two negative Internet mentions for 57 percent to believe a particular item of negative information about a company. Conversely, if a company is trusted then it takes on average only one-or-two positive mentions for 51 percent to believe a particular item of positive information about a company. Edelman concluded that it was good business to align profit and purpose for social benefit.

Another reason for companies collaborating with environmental non-profits is to inoculate a firm against public attacks by more fundamentalist organizations that opt for confrontation rather than cooperation with corporations. For example, Global Exchange launched a protest at Starbuck’s annual meeting and demanded that the company sell more fair trade coffee. The company also was subjected to repeated instances of antagonism from Seattle Audubon and others.

Commenting earlier this year on the net effect of Starbucks CSR activities, Rick Cohen of the Non-Profit Quarterly wrote: “Whether one likes or dislikes Starbucks or its philanthropy, the Starbucks CSR model looks like a recipe that many corporations recognize as a solid formula for social responsibility.

And what is the present-day view of company employees if their employer is perceived to be only concerned with enriching its shareholders? This question was posed by Harvard Economist Edward L. Glaeser in his 2009 Can Business Do Well and Do Good?  He offered that the tide is turning against the Friedman Doctrine as business giants, such as Bill Gates and Warren Buffett, are increasingly arguing the value of CSR.

glaeser

This question was the focus of a MIT Sloan Management essay by C.B. Bhattacharya et al (2008) Using Corporate Social Responsibility to Win the War for Talent, which calls upon employers under pressure to attract-and-retain the best-and-the-brightest employees. Bhattacharya advocates that corporations use internal marketing to champion a company’s CSR efforts as part of a portfolio of “job products” offered to valuable employees. The results of this additional motivation can contribute to job satisfaction, retention and higher productivity.

However, companies must learn to engage in CSR and communicate the news about these activities to its vital internal audience. Many times a company makes only cursory management statements along the lines of “we support recycling” or buries a one-paragraph mention of CSR activities as a throw-away in the text of a chief executive officer’s annual report letter (SEC filing 10K).

Bhattacharya et al state that CSR can serve as a “reputation shield” to parry negative thrusts by NGOs about a company’s impact on society. Knowledge of and employee participation in these CSR activities can also “energize” employees, stimulating them to work harder, be more productive and to focus more on quality. The latter can also contribute to fiduciary responsibility as Harvard Business Professor Michael Porter has argued that quality-driven differentiation along with lower costs are the two basic strategies for creating value for customers.

A corporation’s “reputation shield” has become even more tenuous in this age of 24/7/365 digital self-publishing. As a result, a company’s accumulated brand equity and carefully nurtured reputation are effectively traded every minute of every day online, just like a NYSE or NASDAQ security. And some of these traders are competitors or others that do not have a company’s best interests in mind. Building up goodwill through being perceived as a solid corporate citizen may help mitigate broadsides by those who harbor different agendas.  The recent web disclosure that Burson Marsteller was secretly reaching out to bloggers to chastise Google on privacy concerns without disclosing its client, rival Facebook, turned out to be a black mark on the reputation and brand of both Burson Marsteller and Facebook.

A Balanced Approach?

The debate between the fiduciary responsibility adherents on one side and the devotees of corporate responsibility on the other is not new. In at least one case, the debate was longitudinally conducted by the same organization.

In 1981, the Business Roundtable concluded: “Balancing the shareholder’s expectations of maximum return against other priorities is one of the fundamental problems confronting corporate management. The shareholder must receive a good return, but the legitimate concerns of other constituencies (customers, employees, communities, suppliers, and society at large) also must have the appropriate attention…(Lead managers) believe that by giving enlightened consideration to balancing the legitimate claims of all its constituents, a corporation will best serve its shareholders.”

Sixteen-years later, the Business Roundtable completely reversed its field stating that a corporate board of directors cannot pit its shareholders against other stakeholders. The Business Roundtable said that imposing conflicting demands on corporate boards is unworkable and when push comes to shove between customers, employees and shareholders, a board must down on the side of shareholders.

Even though the debate is not new, the growing trend in favor of corporate social responsibility over merely adherence to fiduciary duties is gaining speed. For example, David Bach and David Bruce Allen in their 2010 What Every CEO Needs to Know About Nonmarket Strategy offer that non-market strategy recognizes that corporations are social and political entities, not just economic agents.

Glaeser wrote that company employees are becoming less enamored with the notion of working their entire lives only to pad the wallets of anonymous shareholders. Even though he agrees with Friedman’s doctrine that corporations “overriding moral obligation” is the fulfillment of fiduciary responsibilities and the maximization of shareholder wealth, he is also a fan of the notion of “Creative Capitalism.”

Michael Kinsley and Conor Clarke wrote the book Creative Capitalism, gathering the contributions of dozens of participants on the issue of corporate social responsibility, including Microsoft billionaire Bill Gates and Berkshire Hathaway billionaire Warren E. Buffett. Both offer counterpoints to the sentiments expressed by Milton Friedman, Larry Summers and others.

In particular, Gates has called for “market-based social change” and for doing the essential work that addresses the world’s inequities. “This kind of creative capitalism matches business expertise with needs in the developing world to find markets that are already there, but are untapped,” Gates said. “Sometimes market forces fail to make an impact in developing countries not because there’s no demand, or even because money is lacking, but because we don’t spend enough time studying the needs and requirements of that market.” The Bill and Melinda Gates Foundation has given $26.1 billion cumulatively, mainly for health and productivity improvements in the developing world.

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A Seat at the Table?

Regardless of the ultimate outcome of the fiduciary duty vs. corporate social responsibility debate, public relations practitioners — internal and external — are coming down reflexively on the side of Corporate Social Responsibility. The question is whether this is a wise personal public relations strategy, when PR practitioners have long complained about not being given a seat at the corporate board room table.

To gain a coveted seat, a budding corporate executive must command respect and exude gravitas. Certainly there is plenty of evidence in support of the growing trend toward CSR including the Edelman Trust Barometer, the notion of “Creative Capitalism” and increasing number of prominent executives who champion CSR. The danger lies in being seen as single mindedly arguing CSR, creating the dangerous perception of being oblivious to a publicly traded company’s fiduciary duties.

Karnani in his commentary issues the following warning: “In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests.”

Public relations practitioners cannot exclusively sing the siren song of Corporate Social Responsibility without acknowledging and implementing the moral obligation of fiduciary responsibility to shareholders, equity-participation employees and to those who are genuinely interested in effective corporate governance (see Sarbanes-Oxley).

Fiduciary duties are legal-and-moral requirements for publicly traded corporations. Diversified shareholders are investing a portion of their future in the projected success of a company. Management is obligated to effectively respond to these investors.

At the same time, they are not the only stakeholders in society. That is where corporate social responsibility comes into the equation. A company doing business in a community does have an ethical responsibility to give back to society and to apply pressure to its supply chain to do the same.

Fiduciary and CSR are not mutually exclusive ethical requirements. Public relations practitioners need to worship at both altars. If not, corporate executives may stop listening before the public relations pros stop talking.

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