Tag Archive: Fiduciary Responsibility


“Bulls make money, bears make money, pigs get slaughtered.” – CNBC Mad Money host Jim Cramercramerpigs

Which decision requires more mental gymnastics?

When to buy?

When to sell?

The author of Almost DailyBrett humbly opines that when to sell is the tougher call.

Why?

There are two kinds of remorse: ‘Darn it the stock kept going up after I sold’; and the worse one, ‘I could have sold when the stock was up, but I was a pig … and oh fiddlesticks, now I am selling when the stock is down.’

Yep, there are a lot of potential could-of, would-of, should-of when it comes to selling.

So what should you do in the view of this humble retail investor (read: Charles Schwab account)?

Don’t Fall in Love

“…Sometimes the most obvious question really is the question. In Enron’s case: How do you make money? – Bethany McLean, Fortune Magazine

Preparing to teach Corporate Public Relations/Investor Relations to Central Washington University seniors and a few juniors starting this coming Wednesday, yours truly will pose the same simple question that Fortune’s McLean posed to Enron’s Jeffrey Skilling: “How do you (Enron) make money?”

Communicators need to have elevator pitches at their ready when asked this very same straightforward question about their own employer. The same is true for investors: How does a company make money? If the answer is clear; you like the company; you understand the business strategy; you have done your homework including consulting with your financial advisor, then it may be time to purchase shares of the company stock.bullandbear

This particular company’s stock is now part of your diversified portfolio, which in turn represents a portion of your retirement savings, a child’s college education, that dream vacation etc.

All is good, but when does it make sense to sell?

Buy and hold is a sure loser. Why? At some point, stocks will stop growing. Your invested company certainly will change, and not necessarily for the better. Circumstances may shift and a wave of caca may hit a company or an industry.

Remember the Internet bubble two decades ago? It burst.

Remember the housing bubble a decade ago. It burst.

Don’t fall in love with your securities. Follow your instinct and your plan. When it is time to pull the trigger and unload the stock, then sell the shares.

Have a Plan

“I love the company. I hate the stock.” – Jim Cramer on Tesla (NASDAQ: TSLA)

Okay, it’s time to confess: I fell in love with the Elon Musk Ion-Lithium Battery/Electric Car story at Tesla. Yes, I bought the stock and road it up and down (pardon the pun) and eventually got tired of the downward roller coaster.muskcar

Before I weighed selling, I considered at what average price point did I buy the stock and how low would it have to go before I would sell the stock? It hit that point, and it was time to sell.

Maybe at some future time, it will be low enough to once again purchase the stock, but only when one is convinced the company has a realistic plan for long-term profitability.

The same is true when selling a stock that is going up. Social media stock LinkedIn (NYSE: LNKD) recorded a blow-out quarter and the stock exceeded my prearranged sell price point. As Joseph Kennedy reportedly said: “Never apologize when taking a profit.”

And we should never worry about paying taxes on our profits; profits are taxable.

The point here is to follow your game plan and sell when it’s time. That’s a good thing, really.

What are some other signs that it is time to sell a stock?

  • The Music Stopped: Once upon a time, Intel (e.g., microprocessors), Microsoft (e.g., software operating systems) and Cisco (e.g., Internet routers and switches) were literally rocking and rolling. We couldn’t get enough of these stocks until … the music stopped. The PC is yesterday’s news. The 1990s came and went. It became time to sell and move on.
  • Commoditization: Just like Intel’s microprocessors became a commodity to serve as the brains of social, mobile and cloud, the same is true for all other semiconductors and those that build semiconductor manufacturing equipment and electronic design automation (EDA) software. Intel’s rumored takeover of Altera, similar to Avago’s absorption of LSI Corporation, are more signs of industry consolidation. If you have not sold already, it’s past time.
  • High Volatility: Sometimes an investor can benefit from a highly volatile stock. A perfect example is Salesforce.com (NYSE: CRM). Lost track of how many times, yours truly has bought, sold, bought, sold, bought … this stock. As long as the trend line is consistently up, it’s okay to let go of the shares now and then, only to become reacquainted at a later date.
  • New Management: Tim Cook is proving that there is life at Apple following the ultimate demise of Steve Jobs, but that is the exception not the rule. Companies change. Business plans shift. Circumstances change. Markets explode or implode. Almost DailyBrett has always followed the mantra that if the old boss or new boss is a bosshole, it’s time to pass on the stock or sell the stock. Translated: Stay away from Larry Ellison and Oracle (NASDAQ: ORCL)
  • No Balance Between Fiduciary and Corporate Social Responsibility: The best run publicly traded companies do NOT see “doing well” and “doing good” as being mutually exclusive. Publicly traded companies with their brands under a digital 21st. Century microscope must appreciate their respective brands are trading in the cloud 24/7/365. Worshipping exclusively at the altar of fiduciary responsibility will no longer cut it. If so, it’s time to sell.
  • Caca Happens: Planes land at the wrong airports (e.g., Southwest). Companies name shoes (e.g., Umbro) after the cyanide gas used in Nazi concentration camps. The CEO falls dead in the backseat of a car (e.g., Texas Instruments). Oil wells explode and gush on global video for three months (e.g., BP). Guano hits the fan. This is precisely the reason not to fall in love with any stock.

Sometimes, it is time to say goodbye.

Breaking up is hard to do.

http://www.thestreet.com/story/10292084/1/bulls-bears-make-money-pigs-get-slaughtered.html

http://en.wikipedia.org/wiki/Joseph_P._Kennedy,_Sr.

https://almostdailybrett.wordpress.com/2011/07/21/what-happens-when-the-music-stops/

https://almostdailybrett.wordpress.com/2013/10/06/how-does-a-company-make-money-2/

https://almostdailybrett.wordpress.com/2014/07/18/donate-to-united-way-or-invest-in-tesla/

http://finance.yahoo.com/video/cramers-stop-trading-tesla-motors-135400997.html

https://almostdailybrett.wordpress.com/2014/01/02/farewell-lsi-logic/

https://almostdailybrett.wordpress.com/2011/12/13/fiduciary-responsibility-vs-corporate-social-responsibility/

 

 

 

 

 

 

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After nearly three decades in the political, association, corporate and agency trenches of professional public relations, and the last four years intensely studying an increasingly complex industry from academic settings, Almost DailyBrett is ready to take a stab at the 17 essential qualities of the consummate PR practitioner.

Please note the list is not meant to be exhaustive and undoubtedly some vital characteristics will be missing. If that is the case, please let this humble blog know your thoughts. For better or for worse, here are the Top 17 attributes of the super-star public relations professionals in alphabetical order:

1. Attuned to the World 

Even though it is impossible to capture everything that is happening on this quickly changing planet, the best PR professionals are well versed even in cases in which their knowledge is one-mile wide and one-inch deep. They don’t know everything; they are not afraid and their ego will allow them to simply state: “I don’t know.” Having said that, they are good at getting to the bottom of an issue quickly, and then presenting the answer in the best interest of their employer/client. 

atlas2.“Be Quick, But Don’t Hurry”

The famous John Wooden quote definitely applies to super PR practitioners. Sometimes it is best to buy time. You may suspect you have the right answer, but your instinct guides you to seek out more. This is especially true in crisis situations. A great PR pro is quick, but never hasty. She or he instinctively knows that a rushed answer or editing of a vital document may result in a wrong response. The best counsel may be to quietly recite: “One Mississippi, Two Mississippi,” before offering a response. That little extra time can make all the difference in the world. 

3. Communications Choreography 

Similar to a producer or director of a Broadway play, the 21st Century PR star knows how to ensure that all the dancers, actors, actresses are in the right place, the lines are perfectly delivered and the music is on key. In the case of public relations, the research has been completed; the messages are composed; the communications are ready to be delivered, and the follow-up evaluation is set to be undertaken. It is without a doubt: Message-Candidate-Campaign in that order.

4. Confident Presentation Skills 

Glossophobia (e.g., fear of public speaking) is not in the vocabulary of the effective public relations professional. She or he responds with a smile, while deep down inside sneering at reportedly the number one fear of most people, public speaking. The great pro doesn’t seek out the stage, but doesn’t shy away for it either. Once there, the message is confidently delivered and questions are coolly answered.

janis

5. Constructive Listening 

Two of the most effective public relations professionals the author of Almost DailyBrett ever had the privilege to meet, are two of the best when it comes to constructive listening: Janis MacKenzie of MacKenzie Communications in San Francisco, and Bruce Entin of Silicon Valley Communication Partners. For both of them, the issues and concerns of you the client or you the subordinate are the only topics on their minds, even though in reality there are always many competing demands for their mental bandwidth. The point is they made time for you. They care. They are ready to help.

Entin

6. Cool Under Pressure

Did someone mention the word, “cool?” We are not talking about being smooth. Instead, we are focusing on a skilled communicator that stays composed when others are losing their heads. Is the company stock down five points? Does a product need to be recalled? Is the CEO being terminated? At least the Bay Bridge is not in the water (remember being told, just that). The sun will come up in the morning. The birds will chirp. The bees will buzz. Life will go on. 

7. Doberman, Not A Cocker Spaniel 

A Cocker Spaniel PR practitioner is simply proficient in providing necessary information to the conventional and digital media. A Doberman PR pro is just as knowledgeable, but even more to the point is also an impassioned advocate and will fiercely guard and protect the reputation and brand of the client/employer. If getting into a fight with a reporter/editor/analyst is deemed necessary, then that is what the job requires. The cheap-shot stops here.

8. Expansive Vocabulary 

A winning public relations professional is a well-read/versed professional. This practitioner is skilled in the use of English, the lingua franca of international business. Knowledge of a second or third language is highly desirable in our digitally flattened global village. It is not just a matter of knowing the words and the meanings behind them, but the right words at the right time in the right settings.

9. Fiduciary Responsibility & CSR 

It has become de rigueur for a public relations professional to advocate corporate social responsibility (CSR) or “doing good.” The best PR practitioners balance CSR with fiduciary responsibility or “doing well.” Fiduciary Responsibility and CSR are not mutually exclusive. PR pros, who understand this undeniable truth, have a better chance of being invited to sit at the boardroom table.

10. Great Student/Lifelong Learner 

What is the next killer app? What is the next “destructive technology?” How is social, mobile and cloud driving technology? What is the next driving mantra in global communications (e.g., radical transparency)? How can we best show (e.g., infographics) as well as speak and write? These are all questions that are constantly pondered by the student, lifelong-learner, PR pro.

11. Honest, Ethical, Reliable 

The first two of PRSA’s core values are “responsible advocacy” and “honesty.” Public relations practitioners are not Switzerland. They are not neutral. They are advocates. Some contend that PR pros cannot be persuasive advocates, advancing a well-researched set of arguments, and maintaining the highest standards of integrity at the same time.

Au contraire!

12. Offensive Without Being Offensive 

Being able to passionately debate crucial points and not make it personal with those who differ is a vital skill, not in great supply. Can you be offensive without being offensive? The best PR pros know, the most important public relations are personal public relations, and that includes interactions with work colleagues and teammates.

13. Qualitative and Quantitative

In our increasingly complex digital world, we cannot escape numbers and statistics. As Chris Roush of the University of North Carolina wrote in his Show Me the Money, behind every number is a story. The superb PR pro, particularly those in corporate public relations and investor relations, can build relationships (qualitative skills) with those closely following publicly traded corporations (e.g., investors, analysts, employees, suppliers, distributors). They are just as adept in reading income statements, balance sheets, cash-flow statements and interpreting the psychology of global markets (quantitative skills).

hoar

14. Refined Sense of Humor

One of the legendary public relations professionals in Silicon Valley history (i.e., Apple, Fairchild, Miller/Shandwick Technologies) was also one of the funniest, the late Fred Hoar. As he was fond of telling anybody and everybody, “that’s Fred, spelled F-R-E-D.” Every year, he served as the master of ceremonies for the SIA (Semiconductor Industry Association) Forecast and Award Dinner, and brought down the house each time with his “hick and stick.” Yours truly was charged with determining whether Fred’s humor met the standards for mixed company in a business setting. Guess you win some and lose some. Regardless, Fred was a crack-up and delightful to know.

15. Superior Judgment

The best PR pros instinctively know the difference between being “bright” and being “smart.” They are not the same. The latter is much more valuable than the former. Sometimes rocket scientists are best being left on the launching pad or maybe just at their workstations. Some are good at stakeholder relationships; some are not. That is why smart PR pros, who can provide sage counsel to those of infinite wisdom, are the best and the brightest in our profession.

16. Tech Savvy 

The 21st Century public relations practitioner is digital, not analog. As Thomas Friedman wrote in The World is Flat, the planet has been made measures of magnitude smaller by the ones-and-zeroes of binary code. All brands and reputations are in 24/7/365 play as a result of instantaneous digital publishing. The Genie is not going back into the lantern. Forward-looking PR professionals embrace new technology communications tools, and are always looking to the horizon for the next destructive technology force. During the course of my career, no PR pro was better in studying engineering and technology than Howard High of Intel, now with life sciences company, Fluidigm Corporation.howardhigh

17. Thought Leader 

Not only do the best PR pros advocate thought leadership by clients, who have proved standing on critical issues of public interest, they also use digital (i.e., blogging, social media, infographics) and conventional tools (i.e., presentations, commentaries, contributed articles etc.). They are always learning and as a result, they have wisdom to share and sage counsel to provide … particularly as it applies to instantaneous world of communications.

Editor’s Note: As the former SIA director of Communications, Janis and her firm served as our PR counselor. Fred was everyone’s friend, and the “Valley” is not the same without him. Howard was the chair of the SIA Communications Committee and provided invaluable counsel as the industry was finally able to open the Japan market. Bruce was my first superior during my decade at LSI Logic. He was the best boss in my career, and now is an even better friend. Naturally these are not the only PR super-stars on the planet, but they are fine examples of the species.

http://www.prsa.org/aboutprsa/ethics/codeenglish/#.VI4DuZU5BCo

http://www.mackenziesf.com/about/janis-mackenzie/

http://siliconvalleycom.com/Bruce_Entin.html

http://www.sfgate.com/bayarea/article/Frederick-Hoar-Silicon-Valley-master-of-PR-2831416.php

https://www.linkedin.com/pub/howard-high/12/aa6/b06

“Public scrutiny of business is constant and intense, and in the past decade, disillusionment has grown over excesses in executive pay, questionable accounting practices, drug recalls, and moral laxity on the part of corporations.” — Paul A. Argenti, Professor of Management and Corporate Communication at the Tuck School of Business at Dartmouth College

Should communication students be encouraged to work for publicly traded companies either from inside the corporation or providing external advice as a hired gun at public relations or advertising agency?

Or should these very same students be galvanized against the excesses of capitalism, demonstrating against Wall Street under the banner of social justice?

floodwallstreet

Are these questions mutually exclusive? Are you either for or against capitalism or for or against social justice?

These questions are magnified and intensified against the backdrop of underachieving employment, wage and real estate markets, while the NYSE and NASDAQ remain persistently bullish.

It appears this persistent economic scenario quite possibly will greet graduating students at least for the next academic year or two.

Examples of Corporate Excess

Finding examples of corporate excess is relatively easy.

Almost DailyBrett has joined the scads of other bloggers that take issue with seemingly brain-dead or just plain greedy antics by the leadership of large-cap publicly traded companies:

  • The author’s former company, LSI Logic, provided a seven-or-eight figure Golden Parachute to former CEO Abhi Talwalkar as he drove the 33-year-old specialty semiconductor designer into the abyss.
  • Spirit Airlines famously stiffed a decorated 76-year old, dying of cancer Marine veteran asking for a mere $197 refund, telling him literally to pound sand because he didn’t buy trip insurance. The carrier generously offered a partial credit, if he succumbed to the Grim Reaper before his flight.
  • October is right around the corner and that means (drum roll) even more corporate efforts to tie marketing bonanzas to Breast Cancer Awareness Month. Both 5-hour ENERGY and “Buckets for the Cure” KFC have become global leaders when it comes to “Pink Washing.”
  • Largest corporate bankruptcy-ever, Enron, is the poster-child when it comes to corporate greed and wrongdoing. And yet there were innocent people who were just trying to do their job, including telling the corporate story, until they realized they too were being misled.

Considering these examples and literally hundreds more, it is easy to give a broad-sweeping thumbs-down to multi-national corporations. At the same time, it should be remembered that these companies make the products and provide the services that we use on a daily basis (e.g., Apple = Macs, iPads, iPhones, iPods). They hire and provide benefits to literally tens of thousands (e.g., Boeing, 168,400; Starbucks, 160,000; Amazon, 88,400; Nordstrom, 58,140), Microsoft, 55,455). They provide wealth-accumulation prospects for the 54 percent of Americans who buy stocks, mutual funds and bonds (e.g., America’s investor class), including 73 percent of college graduates, and 83 percent of post-graduates.

Profit Motive

One of the major beefs espoused by the Occupy Wall Street movement three years ago, and the Flood Wall Street demonstrators earlier this month, is that publicly traded companies are focused on profits. These statements are accurate, but it should also be pointed out that companies have a legal (e.g., Employee Retirement Income Security Act or ERISA 1974) and moral (e.g., Fiduciary) obligation to produce the best bottom-line return possible for shareholders. Failure to do so invites almost certain civil and possible criminal litigation against the companies and potential dismissal of C-level executives.

floodwallstreet1

As a master’s degree candidate four years ago at the University of Oregon, the author of Almost DailyBrett noted the unrestrained celebration of competitive advantage and buy low/sell high mantra at the business school, and the unrestrained embrace of social justice including redistribution of income at the journalism school.

It seemed that one would build a statue of Adam Smith, while the other would throw flowers at the feet of Che Guevara. One would urge students to work and advise corporate America and the other would implore becoming an activist, marching, demonstrating and hopefully not being arrested.

Which is the better option for graduating students in making corporate America, particularly fallible publicly traded companies, more responsive to communities, the environment and let’s not forget, its own employees?

Corporate Social Responsibility

Corporate social responsibility or CSR should not be seen as an oxymoron. The concept of doing good (CSR) should not be viewed as contradictory to doing well (fiduciary responsibility). Graduates of communications, journalism and business schools can and should emphasize the value of doing BOTH to improve the bottom line for investors, including employees, while doing good deeds for communities, the planet and the rank-and-file employees.

Certainly the likes of Occupy Wall Street, which never found a unifying message, and Flood Wall Street, which tied capitalism to climate change, have their First Amendment Rights to (preferably) peacefully demonstrate. These NGOs need trained communicators and message developers.

Conversely, graduates could also choose to work internally to make companies better. They can stand for both fiduciary and corporate social responsibility. They can advocate against excessive C-level compensation. They can take stands against Pink Washing and Green Washing. They can ensure that the public is provided with good products at fair prices and everyone is treated with dignity and respect.

And heaven forbid, if another Enron is in the offing, they can courageouly tell the uncomfortable truth using their communication skills.

Is it better to be inside the corporation under the banner of capitalism or out in the streets (or in tents) calling for social justice?

There is more than one way to make corporate America better for everyone.

http://exec.tuck.dartmouth.edu/about-us/faculty/paul-argenti

http://www.huffingtonpost.com/2014/09/22/flood-wall-street-arrests_n_5865468.html

http://nypost.com/2014/09/22/climate-change-protesters-flood-wall-street/

https://almostdailybrett.wordpress.com/2014/01/02/farewell-lsi-logic/

https://almostdailybrett.wordpress.com/2012/05/06/lessons-from-the-spirit-airlines-pr-debacle/

https://almostdailybrett.wordpress.com/2012/05/02/evil-spirit-airlines/

https://almostdailybrett.wordpress.com/2013/10/10/5-hour-pink-washing/

https://almostdailybrett.wordpress.com/2014/05/22/shameless-5-hour-energy/

https://almostdailybrett.wordpress.com/2012/10/11/buckets-for-the-cure/

https://almostdailybrett.wordpress.com/2013/02/08/what-would-you-do-if-you-were-enrons-pr-chief/

https://almostdailybrett.wordpress.com/2011/12/13/fiduciary-responsibility-vs-corporate-social-responsibility/

https://almostdailybrett.wordpress.com/2011/06/03/adam-smith-vs-che%e2%80%99-guevera/

 

 

“There you go again.” – Ronald Reagan debating Jimmy Carter in 1980

Wonder why more than a few consider “corporate social responsibility” to be an oxymoron?

Can corporations, especially publicly traded companies, serve both masters: fiduciary responsibility (do well) and CSR (do good)? It can be done, but the effort has to be sincere and meaningful.

Sorry 5-hour ENERGY®. There you go again.

5-hourvets

First, Living Essentials (parent of 5-hour ENERGY) mounted a mucho grande marketing campaign with special pink raspberry bottles in order to make an un poquito contribution to Living Beyond Breast Cancer (LBBC). The Integrated Marketing Communications (IMC) campaign even came with a plethora of television ads and a specially decaled NASCAR racer being driven by Clint Bowyer

Now, it is time for yet another mucho grande marketing campaign with special red-white-blue bottles in order make another un poquito contribution, this one to the Special Operations Warrior Foundation (SOWF). Do you think that 5-hour ENERGY just commissioned another specially marked Bowyer stock car for the occasion?

Does a bear relieve itself in the woods?

In addition, the company even sponsored a 400-mile NASCAR race in Kansas just in case you missed any of 5-hour ENERGY’s ads.

Even in-your-face syndicated radio sports jock Jim Rome got into the act, pimping for these $2.99 (today’s retail price) red-white-blue bottles of 5-hour SPEED.

And how much will be raised for the wounded vets? (Drum roll) Not less than $75,000.

Wasn’t the $75,000 minimum the same figure for when 5-hour ENERGY contributed a nickel from the sale of each $2.99 pink bottle (less than 2 percent of retail) to the breast cancer foundation?

Why is Almost DailyBrett underwhelmed?

Real Corporate Social Responsibility

“It is amazing what you can accomplish if you do not care who gets the credit,” – Harry Truman

SBUXCI
Contrast the shameless 5-hour ENERGY CSR-in-disguise campaign with the synergistic relationship between Starbucks (NASDAQ: SBUX) and Conservation International (CI) on behalf of the environment and the farmers in the Chiapas region of Mexico. This is the same case that was examined in-depth by Harvard Business Review. 

The relationship between the for-profit Starbucks and the NGO Conservation International took time to develop. Starbucks wanted to help, but it insisted on not compromising the quality of its mild Arabica coffee beans for its discerning customer base. In the end the two disparate entities teamed in setting standards for Starbucks’ coffee supply chain in the Chiapas including the planting of shade trees and no coffee pulp being thrown into the rivers.

Just imagine, Starbucks and its NGO partner, Conservation International, accomplished impressive deeds together without the need for specially marked cups or a spiffy race car.

This same is true for Ronald McDonald House Charities, including the 338 Ronald McDonald houses around the world, a direct offshoot of the fortune made by McDonald’s founder Ray Kroc. Ditto of the Home Depot Foundation and its $1.5 million partnership with Habitat for Humanity to build homes for veterans.

Let’s not forget Nike founder Phil Knight’s $100 million contribution for the Knight Cancer Institute at Oregon Health & Science University (OHSU), and another $125 million for the OHSU Cardiovascular Institute. There were also some celebrated “Uncle Phil” contributions to the University of Oregon and Stanford University.

And of course we need to salute the efforts of another billionaire, Bill Gates and his spouse Melinda, establishing the Bill and Melinda Gates foundation. The foundation’s $38.3 billion endowment targets promoting health care and reducing extreme poverty around the world.

“Pink Washing” Close Call

kfc

Before 5-hour ENERGY got into the Think Pink act, YUM Brands’ KFC Division launched a controversial “Buckets for the Cure” campaign benefitting the Susan G. Komen Foundation.to combat breast cancer. A portion of the sale of each specially marked bucket of grilled chicken was devoted to the work of the Komen foundation.

Some have called this effort true CSR. Others have labeled it, Pink Washing. Whichever way one comes down on the “tastes great” vs. “less filling” divide, there is no question that KFC raised a reported $4.2 million to combat and find a cure for breast cancer.

There are many, who simply do not like KFC (formerly Kentucky Fried Chicken) and will not see anything positive undertaken by the company. Having said that, there is a legitimate debate whether “Buckets for the Cure” was a crafty marketing campaign, a well-intentioned CSR thrust or a combination of the two. Let the Fiduciary Responsibility vs. Corporate Social Responsibility debate commence!

5-hourspecial

When it comes to 5-hour ENERGY and its guarantee of $75,000 to the wounded vets, compared to its massive marketing campaign, NASCAR race and race car, one has to make the call:

5-hour ENERGY once again stands guilty of disguising its massive for-profit marketing campaign as an attempt to help (fill-in-the-blank).

There you go again.

http://www.5hourenergy.com/5hrNews-2014-04-14.asp

https://almostdailybrett.wordpress.com/2013/10/10/5-hour-pink-washing/

https://almostdailybrett.wordpress.com/2011/12/05/lattes-cappuccinos-mochas-and-csr/

http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6413&facInfo=pub

http://www.brainyquote.com/quotes/quotes/h/harrystru109615.html

http://www.rmhc.org/what-we-do

http://www.homedepotfoundation.org/page/our-partners/habitat-for-humanity-international

https://almostdailybrett.wordpress.com/2012/10/11/buckets-for-the-cure/

https://almostdailybrett.wordpress.com/2012/09/25/taxing-uncle-phil-to-death/

http://en.wikipedia.org/wiki/Bill_%26_Melinda_Gates_Foundation

https://almostdailybrett.wordpress.com/2011/12/13/fiduciary-responsibility-vs-corporate-social-responsibility/

http://www.nascar.com/en_us/race-center/sprint-cup-series/5-hour-energy-400.html

 

 

 

 

 

 

 

 

 

5-hour Pink Washing?

KFC’s controversial “Buckets for the Cure” campaign has competition, when it comes to being pink … and green.

Enter Living Essentials’ 5-hour ENERGY®’s special raspberry flavor with five cents of every $2.16 bottle (the cost if you buy a 12-pack online) being directed to Living Beyond Breast Cancer (LBBC).

5hourraspberry

To demonstrate its sincerity to the cause of beating breast cancer, 5-hour ENERGY issued a news release with the first quote coming from its Communications Director Melissa Skabich: “Our company has a strong history of supporting causes that fight breast cancer.”

The second quote came from her counterpart at LBBC.

“The financial contribution and the comprehensive media campaign by the makers of 5-hour ENERGY® products will help us to reach many people who are currently unaware of the programs and services that LBBC offers to those facing a breast cancer diagnosis,” said Kevin Gianotto, LBBC’s Associate Director, Marketing and Corporate Relations.

Thank God the 5-hour ENERGY’s registered trademark made it into the non-profit spokesman’s quote about the company’s  “comprehensive media campaign.”

If this is such a noble cause, how about quotes from the principals (e.g., CEOs) at both 5-hour ENERGY and LBBC? Or does their absence suggest that just maybe the heads of these respective organizations are a tad sheepish about this marketing exercise?

If you don’t believe Melissa about her company’s dedication to the pink cause, check out the specially branded 5-hour ENERGY race car driven on the NASCAR Sprint Cup Series circuit by Clint Bowyer.

5hourracecar

And if you still need further proof, just turn on your HDTV and it won’t be long before you see yet another 5-hour ENERGY ad for its special raspberry flavor, available thru December 31, with five cents of every bottle being directed to LBBC.

Let’s do the math.

You can buy 2,000 bottles at $2.16 each ($4,320) of raspberry 5-hour ENERGY and $100 will be donated to LBBC…

…or you could write a $100 check to “Living Beyond Breast Cancer.”

Hmmm…that means you could do just as much good in the fight against breast cancer, simply writing a $100 check and keeping $4,220 in your own pocket.

As I write this particular Almost DailyBrett post, I do not want my prose to come across as yet another example of the old adage: No good deed goes unpunished.

Personally, I am a cancer survivor and my first wife died of stomach cancer. This is matter of deep concern to me. I want to beat all forms of cancer.

Last year, Living Essentials’ contributed $387,000 to fighting breast cancer and the company has pledged at least $75,000 this year. That’s real money. This is a vital cause. October is Breast Cancer Awareness Month, a fact that certainly is not lost on the folks at 5-hour ENERGY.

The brass at 5-hour ENERGY has a fiduciary responsibility to its investors to do well in terms of the top line and the bottom line. The same management team should also do good by practicing corporate social responsibility (CSR), giving back to communities where it does business.

Fiduciary responsibility and corporate social responsibility are not mutually exclusive terms. But what happens when the first (fiduciary responsibility) is disguised as the second (CSR)?

Yum! Brands Inc. (NYSE: YUM) owns and operates KFC. Yum! Brands generated its own Pink Washing controversy when it introduced grilled chicken, pink “Buckets for the Cure” with a portion of the proceeds being directed to the equally controversial Susan G. Komen Foundation.

kfc

Was the marketing campaign for the pink buckets of grilled chicken a fiduciary exercise or a corporate social responsibility (CSR) endeavor or both?  KFC reportedly delivered 50 cents for each bucket sold and raised $4.2 million.

The Oregon Ducks wore pink helmets for their October 19 football game against Washington State. After the game, the team auctioned off 25 of these helmets, raising $200,000 for the Kay Yow Cancer Fund.

What is 5-hour ENERGY promising? Wow, $75,000.

Am I suggesting that companies can’t emphasize CSR, while keeping an eye on the bottom line? Absolutely not. McDonald’s is offering healthier food choices. Toyota unveiled the hybrid, energy-efficient Prius. Home Depot has given building materials to Habitat for Humanity.

About half of our public relations students at the University of Oregon School of Journalism and Communication (SOJC) were comfortable with Yum! Brands’ “Buckets for the Cure” campaign, while the other half believed KFC was engaging in Pink Washing.

Almost DailyBrett contends that Living Essentials’ 5-hour ENERGY should have learned something from the Yum! Brands experience, and should have exercised greater caution.

Pledging a minimum of $75,000 is ridiculously low (basically a company rounding error), and less than seven figures is not sufficient when you consider the intense over-the-top marketing.

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And speaking about swinging for the fences, the specially decaled 5-hour ENERGY® NASCAR racer fits the classic definition of in-your-face, and is clearly superfluous.

And at a minimum 5-hour ENERGY public relations types, ask your CEO and the chief executive of Living Beyond Breast Cancer (LBBC) to lend their names to the cause.

That way, 5-hour ENERGY would have a better chance of passing the giggle test, and deflecting the inevitable pink washing charges and allegations.

Can you spare a nickel?

http://www.naturalnews.com/037645_avon_breast_cancer_pinkwashing.html

http://en.wikipedia.org/wiki/5-hour_Energy

http://thinkbeforeyoupink.org/?page_id=13

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

http://www.ispot.tv/ad/72RO/5-hour-energy-raspberry-good-deeds

http://www.5hourenergy.com/5hrNews-2013-09-09.asp

http://www.shop5hourenergy.com/detail/5HR+RASPBERRY+12

http://www.lbbc.org/

http://www.naturalnews.com/028670_Komen_for_the_Cure_fraud.html

http://ww5.komen.org/

https://almostdailybrett.wordpress.com/2011/12/13/fiduciary-responsibility-vs-corporate-social-responsibility/

https://almostdailybrett.wordpress.com/2012/10/11/buckets-for-the-cure/

http://www.oregonlive.com/ducks/index.ssf/2013/10/oregon_football_ducks_pink_hel.html

“The cab driver boasted that his daughter had just graduated. But then he admitted that her journalism degree from the University of Wisconsin had cost $140,000. Since journalism is an ill-paid job that requires no formal qualification, this sounds like a waste of money.” – The Economist, Universities challenged, August 31, 2013

cabdriver

Those are fightin’ words.

Doesn’t The Economist benefit from well-trained and clever journalists?

Should we just shut down all journalism and mass communication schools nationwide, if not worldwide?

Would the last J-school student be kind enough to turn out the lights?

This revealing provocative lead in which the Economist writer shared her/his intimate conversation with a Chicago area cabbie (so much wisdom is imparted in cabs) actually concerned the state of affairs of higher education. Namely, the upcoming federal Department of Education (DOE) ratings system in which colleges and universities conceivably will be judged for federal hand-outs based upon cost, graduation rate and how much students earn in their careers.

And you thought the Bowl Championship Series (BSC) metrics were Byzantine? Thank Darwin we only have to endure this system for one more year. The DOE standards/regulations could be with us into the indefinite future…which could be, forever.

Now that we have clarified the basic premise of the article, let’s go back to the notion that journalism is “ill paid,” that it requires “no formal qualification” and the implication that university journalism schools are a “waste of money.”

Other than that Mrs. Lincoln, how was the play?

Considering that I have two journalism-related degrees (one undergraduate and the other post-graduate) and I spent more than three-decades as a reporter (a few years) and as a public relations practitioner (a lot of years) and lately as a college instructor (a few more), I have a problem or two with the gross oversimplification exhibited by The Economist.

There is no doubt that college is damn expensive and not getting cheaper anytime soon. And yes, traditional Gutenbergesque journalism is in trouble. The business model doesn’t work anymore. Having acknowledged the obvious, these conclusions miss a major point: The global desire and yearning for instantaneous-and-accurate information on a 24/7/365 basis has never been greater.

The ability to tell the story, and to tell it well whether it be a reporter/editor, a public relations practitioner or advertising professional is in constant demand and cannot be effectively outsourced or offshored en masse.

The methods for telling, reporting and disseminating the story are changing. The world has moved from analog to digital. The demand for information outstrips the supply, and this trend is accelerating. This is an upward-to-the-right market.

And how will future journalism, public relations, advertising, social media and multi-media professionals learn these information development and dissemination skills? How about these supposedly “waste-of-money” journalism schools?

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1.)  Writing effectively will always be in demand, particularly by those who can quickly come to the point, provide insightful analysis, and write professionally and skillfully, employing AP Style.

2.)   Understanding the concept of the inverted pyramid in which the crux of the story is in the lead and all the supporting information flows from there.

3.)   Determining whether a story is newsworthy (or not) for target audiences. Learning how to ask the What? When? Where? Who, Why? And How?, ascertain these answers and transmit a complete-and-clear picture succinctly to news transmitters, whether they are conventional or digital.

4.)   Grasping and using “Big Data” in the form of compelling infographics to quickly and efficiently present useful information to critical audiences.

5.)   Appreciating that social media is not monolithic. There is a distinction between “connections” and “friends” online. Yes, you can digitally self-publish in 140-characters or less. Blogging is alive and well. Social media can be radioactive as digital miscues are eternal.

6.)   Comprehending the societal and technological shift from two-way asymmetrical communication theory (one to the masses) to digitally enabled two-way symmetrical communication theory conversations (message receiver responds publicly to the message sender).

7.)   Gaining the skill sets to generate professional digital photos, audio and video and use state-of-the-art software (e.g., Final Cut Pro) for compelling multimedia pieces.

8.)   Garnering the knowledge of financial communications including relevant SEC disclosure rules and being able to distinguish between fiduciary responsibility and corporate social responsibility.

9.)   Overcoming glossophobia and becoming more confident in delivering presentations, particularly those that are conversational in style and using supporting graphics.

10.)  Securing the confidence to perform instinctively in a crisis communications setting, quickly develop relevant messages and ultimately protect an organization’s reputation and brand.

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There is little doubt that journalism, public relations, advertising, social media and multi-media educators, graduates and students can add to the Almost DailyBrett list of J-School attributes cited above, including cultural distinctions inherent in international communications.

What’s more important is that when one considers and weighs the skill sets that are being taught and learned, particularly in a rapidly changing technology landscape, the value of a solid journalism education is maybe as valuable as it has ever been.

Society’s insatiable demand for news and information has never been greater.

The Genie is simply not going back into the bottle.

http://www.economist.com/news/united-states/21584393-barack-obama-wants-degrees-be-better-value-money-universities-challenged

 

 

“Buckets for the Cure”

It never fails to stir up emotions, particularly in October (e.g., National Breast Cancer Awareness Month).

It is represented by a simple image, illustrating a pretty-in-pink bucket of grilled chicken.

It describes a marketing campaign that raised 50 cents per bucket and ultimately delivered $4.2 million to date to fight breast cancer.

And yet blood pressure always seems to rise and passions start flowing. Is this a case of no good-deed going unpunished, or something much deeper?

One person’s CSR (Corporate Social Responsibility) is another person’s “Pinkwashing.”

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In one corner is for profit Yum Brand’s KFC Division (once known as “Kentucky Fried Chicken”) on the other is non-profit Susan G. Komen for the Cure. Or maybe they are not in separate corners, but instead joined at the hip?

For present-and-future PR practitioners, I have seen this debate played out several times in the last two-plus years, and there is nothing even remotely approaching consensus on this ethical issue.

Reportedly, Susan G. Komen is the largest non-profit source for breast cancer research and advocacy. Susan G. Komen touts 240 corporate donors, and KFC is just one of these donors. And yet the knives are out for KFC primarily, and also for Susan G. Komen for signing off on KFC’s marketing campaign in order to raise millions to fight breast cancer.

To some encouraging patrons to consume grilled chicken breasts to save female breasts is too much of a mental metaphor to process. Fatty chicken contributes to breast cancer, so doesn’t the KFC/Komen alliance constitute shameless hypocrisy? That question has been asked repeatedly.

As a consuming public, we have been demanding that “Big Food” take action to notify us of the calorie count in its fast-food offerings and to offer healthier choices. As Martha Stewart would say, “It’s a good thing.”

As Almost DailyBrett reported, publicly traded companies (e.g., $13.5 billion NYSE: YUM) have a fiduciary obligation to promote profitability for their shareholders, many of whom are future retirees or parents with kids approaching college, investing in mutual funds and individual stocks.

At the same time, we are asking these corporations to give back to the communities they serve and take action to protect the environment through Corporate Social Responsibility. Yum Brands would naturally contend that its grilled chicken is a healthier consumer choice, and that it has raised more than $4 million to fight breast cancer. Isn’t this a case of both fiduciary responsibility and CSR? Would it be better for KFC to just offer original recipe or extra crispy to go along with the fat-laden side dishes and not give a dime to Susan G. Komen or any other non-profit?

When it comes to vilification, Susan G. Komen has been the subject of rhetorical broadsides even though it has invested nearly $2 billion for breast cancer research, education and advocacy. The largest single donation? $4.2 million from…KFC. At times, Komen has demonstrated a PR tin ear (gun-toting Smith & Wesson donation; Planned Parenthood debacle), but overall the foundation has been one of the leaders of the charge against breast cancer.

Shouldn’t we be celebrating corporate entities practicing CSR and helping non-profits? Or do some of us detest corporations so deeply and by extension, capitalism, that they would prefer for corporations to not offer and promote healthier choices, and give nothing back to our communities?

From this humble perspective, we instinctively know that life is not perfect and certainly not fair. Having said that, shouldn’t we be encouraging all to do good things, regardless of how large or how small (e.g., “Random acts of kindness”)? Isn’t the key to move the dial from an ethical and societal standpoint upwards and to the right? Shouldn’t we all have good intentions?

Or was mumsy right, when she reminded me: “The road to hell is paved with good intentions.”

http://blogs.courier-journal.com/derbycitycents/2012/10/07/yum-brands-david-novak-on-buckets-for-the-cure-criticism/

http://abcnews.go.com/Health/Wellness/kfc-fights-breast-cancer-fried-chicken/story?id=10458830

http://www.washingtonpost.com/wp-dyn/content/article/2010/04/30/AR2010043001971.html

http://finance.yahoo.com/q/pr?s=YUM+Profile

https://almostdailybrett.wordpress.com/2011/12/13/fiduciary-responsibility-vs-corporate-social-responsibility/

http://ww5.komen.org/

http://en.wikipedia.org/wiki/Susan_G._Komen_for_the_Cure

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

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.

How do you follow a lecture about male and female condoms including a video demonstration about inserting the latter?

And in particular, how do you compete with an erotic discussion about “social marketing” (not to be confused with social media) with a lecture about financial statements, fiduciary responsibility and market psychology?

The answer is to remind students that it all boils down to dollars-and-cents and return on investment (ROI).

There is no doubt that condoms, both the ubiquitous male version and the relatively new offering for the female of the species, do help defend against nasty STDs. And I will humbly submit that knowledge about financial statements from the top-line-to-the-bottom-line may help guard against long-time unemployment. It may also make you wealthy and fiscally healthy.

Take a look at a 2006 PRSA/Korn Ferry International Survey of average salaries from public relations practitioners. Financial public relations/investor relations pros averaged $165,620 (serious money); Crisis management specialists, $150,000; Reputation management, $143,000; Public affairs (lobbying), $98,500 and Community relations, $59,910.

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Yes, the survey has grown some moss in the last five years and the world is now in a global economic funk, but I seriously doubt the employer preference for those who know how to work with investors and positively impact share values has changed. There may also be some cross over between financial/IR and crisis management/reputation management, but they are all handsomely compensated.

When you take financial statements into account, a job applicant should be less prone to state that “I really work well with people” in an interview with a perspective employer. What is the ROI (return on investment) in that particular overused assertion? How can you separate yourself from your competition for a job if your only claim to fame is working well with people?

Keep in mind that any firm – profit or non-profit, private sector or public sector – is making an investment in hiring any employee. One of the primary factors for the nearly 10 percent unemployment rate is the massive amount of private capital sitting on the sidelines waiting for certainty from Washington and Brussels…err Berlin…something that may not happen until 2013.

And if these firms are making an investment, they are asking what is the return on the invested capital. Will this new employee get quickly up to speed? Will she or he bring existing contacts to the job? Does her or his prior have experience that directly relates to the job? Can she or he solve a particular problem? Does she or he speak our language? Can she or he become fluent in the lexicon of our company?

Corporate fluency includes understanding how a business operates. And this also applies to non-profits that are also governed by the tyranny of the financial statement. They may be not-for-profit, but at the same time they cannot consistently lose money if they want to stay in “business.”

investorrelations

Do you understand what constitutes the top line other than it is located on the top of the page? Hint it has to do with revenues. What about COGS? If you don’t know, you need to find out pronto. The same goes for gross margin. Is it expanding or contracting? Year-over-year? Sequentially? Is your function included in SG&A? If so, how do you feel about being an “expense?” Can you distinguish between gross margin and operating margin? What is the bottom line other than being on the bottom of the page?

Companies also must comply with GAAP, but some will also use pro forma or non-GAAP and are required by the SEC to reconcile the difference (Reg. G). Don’t be the reporter in Chris Roush’s “Show Me The Money,” who asked a CEO what the Southeastern Conference (SEC) had to do with his business…He was referring to a different SEC, the Securities Exchange Commission. Oops.

In this tough job environment, doing your homework prior to the interview is an absolute must. Included in this study is coming completely up to speed on the language of business and that includes the financial statement and fiduciary responsibility.

Adam Smith stated that the (fiduciary) duty of a capitalistic endeavor is to make a profit and remain viable. Economist Milton Friedman said the job of business is not only to survive but to do well.

So how can you help your perspective employer or present employer in doing well? If you can answer this question affirmatively and convincingly, you should do well as well.

Editor’s Note: I am presently working on my University of Oregon master’s project creating a course, “Communicating with Wall Street.” Any insights on market psychology, media relations, crisis communications, analyst relations, social media and employee communications are greatly appreciated.

oxymoron  (ˌɒksɪˈmɔːrɒn)
 
n  , pl -mora
  rhetoric  an epigrammatic effect, by which contradictory terms are used in conjunction: living death ; fiend angelical
 
[C17: via New Latin from Greek oxumōron,  from oxus  sharp + mōros  stupid]

 A colleague recently approached me asking for my humble opinion about a newly created senior manager of Corporate Affairs position for a publicly traded company in the data storage space. In short order while reading the position description, my cerebral alarm bells were going off.

The main responsibility of the anointed senior manager of Corporate Affairs would be to “execute the company’s Corporate Social Responsibility (CSR) responsibilities.” Hmmm …

I was left wondering how long it would take the company to “execute” the senior manager of Corporate Affairs responsible for CSR in the face of the next inevitable technology industry downturn. This position has all the sounds of classic SG&A (selling, general and administrative) or a corporate expense, which Finance departments will curtail if not outright eliminate.

Just as widely extolled video news releases (VNRs) of the 1990s made shameless PR firms gobs of cash while being round-filed or cut-up for “B-roll” by television station producers, the virtues of CSR are now part of every pitch made in agency reviews or RFP response cattle calls.

But is CSR in its purest form really an oxymoron? Do the words, “corporate” and “social responsibility” really belong in the same sentence? Please don’t giggle.

aneelkarnani

As Aneel Karnani of the University of Michigan Business School wrote in the Wall Street Journal www.wsj.com there are cases in which companies have done good things for society and the environment, including serving healthier foods at fast-food restaurants and offering more fuel-efficient cars. Yes, companies can be green while chasing green. http://www.bus.umich.edu/FacultyBios/FacultyBio.asp?id=000119664

But let’s keep in mind that the pursuit of profits and delivering shareholder value are the core missions of the executives in corporate boardrooms, not saving the world. In all due respect, Mother Teresa never had to lead quarterly earnings report conference calls or answer questions at annual meetings of shareholders. http://en.wikipedia.org/wiki/Mother_Teresa

“Very simply, in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will end up increasing social welfare,” Karnani wrote. “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.”

And speaking about shareholder interests, there is this little notion called, fiduciary responsibility, that trumps corporate social responsibility each and every time. And that may not be such a bad thing.

“The movement for corporate social responsibility is in direct opposition, in such cases, to the movement for better corporate governance, which demands that managers fulfill their fiduciary duty to act in the shareholders’ interest or be relieved of their responsibilities,” said Karnani. “That’s one reason so many companies talk a great deal about social responsibility but do nothing—a tactic known as ‘greenwashing.’”

Certainly companies that act irresponsibly and end up hurting society and the environment (e.g. British Petroleum or BP “Deepwater Horizon oil spill) will be punished by vote-seeking politicians, marauding plaintiff’s attorneys, consumers, shareholders…just to name a few. It is good business to maintain a positive reputation and a strong brand…and that means also protecting that brand. http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

oilspillbird

Having said that, expecting companies to worship exclusively at the altar of Corporate Social Responsibility in the face of a potential double dip recession where mere survival maybe job #1 just simply doesn’t jive with reality. As the late Ann Richards once said: “That dog don’t hunt.” http://en.wikipedia.org/wiki/Ann_Richards

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