Lying to the Media is Never OK, Never Was, Never Will Be

A recent op-ed in the Los Angeles Times, “Who is Hope Hicks, and What’d she do?” by Virginia Heffernan has struck a chord among PR pros.

Newly appointed Hicks, 29, is the third director of communications for the current White House, and the youngest in history to hold that position.

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Hope Hicks followed by White House Press Secretary Sarah Huckabee Sanders. Photo credit: Doug Mills/The New York Times

While news of her relationship with former Trump Staff Secretary Rob Porter was not the subject of Heffernan’s editorial, the author’s portal of Hick’s job as a “flack” is what’s sending shockwaves throughout the public relations industry.

For those unaware, a flack is a pejorative term sometimes used by journalists to label less-than-scrupulous public relations people, not to be confused with a “hack,” which connotes a security breach or taxi driver, and is a term occasionally used to label a “sloppy” journalist. Both have negative connotations.

According to Heffernan, Hicks was born into a “family of high-level flacks, whitewashing the unsavory practices or grave misdeeds of Texaco, the NFL, Harvey Weinstein and Donald Trump,” a reference to her family’s work as crisis communications counselors, and now as the White House communications chief, potentially deceiving the public regarding an obstruction of justice charge.

Right, wrong or indifferent, op-eds are opinion pieces. And the author of this one certainly got it wrong when she wrote, “lying to the media is traditionally called PR.”

No, it’s not. It never was and never will be.

Ironically, the PR industry at times may grapple with its own image problem. However, references to spin doctors and flacks only perpetuate a stereotype.

PR pros are essentially spokespeople, not always necessarily quoted in stories, working in the background, assisting reporters to help them do their jobs. Whether representing a brand, association or publicly traded company, PR practitioners are usually the first point of contact between reporters and clients. Building meaningful relationships with journalists based on trust is paramount to effective media relations, and to the livelihoods and careers of many public relations executives.

Although the percentage has slipped from 2016 to 2017, PR practitioners are still the third most important sources of information for journalists, behind subject experts and industry professionals, according to the 2017 Global Social Journalism Study.

One can agree that it takes a certain skill to effectively navigate any crisis communications situation, especially in a hostile media environment. Reporter deadlines coupled with mounting pressure only adds to the stress of providing timely, accurate, and credible information. But that is what makes the PR industry so specialized.

Every profession can have bad actors, or those on occasion that make mistakes, but the PR industry abides by a code of ethics, values vital to the integrity of the profession as a whole. It’s not fair, nor appropriate, to single out one instance to characterize an entire industry.

Lying to media only gets PR practitioners shunned as ineffective communicators, which often leads to loss of clients, loss of jobs, and the end to careers.

— George Medici, gmedici@pondel.com

 

Has Activism Waned?

High impact activism campaigns declined in 2017, according to a recent webcast by law firm Morgan Lewis, down to 298, the lowest level since 2013.  There were 80 proxy fights in 2017, down from a high of 133 in 2009.

Even considering these statistics, activism remains a key component of the investment community’s goal of improving shareholder value at the companies they own. A few of the reasons cited on the webcast for ongoing activist pursuits are regulators’ lack of enthusiasm to “stem the tide of shareholder activism,” substantial inflows of capital to activists, an “M&A environment that encourages activists to push companies into play,” and increased willingness by companies and their boards to engage with activists.

Targets generally have several things in common. Has your stock performed poorly?  Do you have excess cash on your balance sheet?  Has total shareholder return lagged your peers?  If so, activists might have their sights set on you.  Are your corporate governance practices lacking?  Is your CEO a woman?  According to Harvard Business Review, activists are more likely to target female CEOs (but that’s a subject for a completely different blog post).

Once a target is identified, how do activists carry out their missions? Morgan Lewis provides a playbook that includes accumulating shares in the target company, engaging with the company, applying pressure, and finally, seeking influence and control.

There are several ways companies can track activist activity to lessen the surprise if an advance is made. Increased trading volume, meeting requests from activists at investor conferences, market rumors, and SEC filings (although this list is nowhere near exhaustive), can all signify a coming fight.

More importantly, there are several ways companies can help prevent an activist attack. Conduct a vulnerability assessment, which should include looking closely at recent and historical performance (both financial and operational), understanding your current shareholder base, and reviewing board composition and bylaws, among others.  You can also consider adopting a shareholder rights plan to discourage hostile takeovers, review the company’s plans for enhancing shareholder value, and be active in the investment community rather than going underground (again, this list is far from exhaustive).  Perhaps take the advice of Canadian Lawyer and “think like an activist.”  It may be cliché, but the best defense often is a good offense.

— Laurie Berman, lberman@pondel.com