Trust, Transparency and …power!
April 13, 2011 4 Comments
There are a number of very interesting discussions going on at the moment in my favourite blog, about trust , about transparency and about CSR.
I have already nailed my colours to the mast and said that I think all communication is inherently asymmetric, because information is never shared equally between two parties, nor is interest in the discussion. A company has a lot of reasons to want to communicate some (but not all!) of the information it has, but stakeholders have a lot of voices competing for their attention, and are less likely to want to listen. In that environment, how do you cut through the noise and give stakeholders want they want and need?
Craig Pearce makes a case for organisations being up front with the negatives, because honesty can win trust, and create a dialogue, especially if it is clear that the news will get out anyway (accelerated or not by social media). I think a lot depends on which stakeholders you are talking about. Coming from a financial services background, I have a predilection for investor relations- and they are the ones who can kill a company. So, I am not surprised that companies have statutory obligations to release price sensitive information in a controlled manner. Disclosure here is strictly legally controlled and required.
I am continually surprised, however, by my students’ surprise that CSR issues are not that important to customers or consumers. Every year I watch their research efforts come up with the same results- that while “nice to have”, ethical sourcing and other CSR attributes will not often win against price considerations for the majority of “the public”.
Where CSR actually bites hardest is …amongst the investors. There is an entire discipline devoted to measuring, hedging and managing corporate risk. I know, I used to work for an investment bank. And CSR risk increasingly features in that calculation of corporate risk. Don’t believe me? Check out FTSE4Good. This is above and beyond the “ethical investment” niche market. Corporate management is taking more care these days to factor in CSR KPIs into their risk calculations- less because of fear of damaging their reputation amongst customers and more in fear of regulatory backlash.
If communication is about change (either promoting it or protecting against it, as Craig argues), then the most powerful change agents out there are the regulators, who, with one change of the law or statute, can change the rules of engagement. Because I have been a lobbyist, I never estimate the power of the politician to create havoc- intended or not- through well meaning but daft legislation.
So, I will add to my political incorrectness by arguing that not only is all communication asymmetric, but I also believe that all stakeholders are not equal, nor should they be treated as such. When resources are stretched, budgets under threat and the pressure is on, PR and communications functions need to prioritise their stakeholder communication. And it all comes down to focusing on those with the most power.