Three Toots on Hitting the Big Five-0

By now, those who know us, know that PondelWilkinson turns 50 this year.

A half-century is a long time for any company to be in business. Throughout those five decades, while we have tooted the horns of our clients—we have not tooted our own. So, please allow me this rare exception to make three little toots:

First, a toot to the firm’s founder and my former boss, Mel Rifkind, 93, who kicked things off in 1968, when I was still in school and had not the foggiest idea that our kind of business even existed. Mel was a pioneer in our industry, who founded our firm on four principles that remain at our core today: apply sound thinking to meet unique client challenges; attract the best talent, regardless of position; deliver quality, responsive service; and always operate in a respectful and ethical manner.

Second, a toot to our clients and all associated with our firm for the confidence you continue to place in our organization.

And third, a deep personal thanks to our loyal, talented, hard-working staff, the best professionals in our industry, and to those who have served us in the past, of course including my late partner of 25 years, Cecilia Wilkinson. People are our only assets, our secret sauce, and our treasures.

Now for the fun stuff. What else happened in 1968, the year our firm was founded?

  • Sixty Minutes made its debut on CBS.
  • Apollo 8, the second manned spacecraft, orbited another world, the moon, for the first time.
  • The Special Olympics held its first event.
  • Our very own trade association was born, NIRI.
  • Sadly, Martin Luther King Jr., 39, and Robert Kennedy, 42, were assassinated.
  • The 911 Emergency Line was launched.
  • The Big Mac was introduced for 49-cents.
  • President Lyndon Johnson signed the Civil Rights Act.
  • A few famous people were born: Will Smith; Naomi Watts; Hugh Jackman; Marc Anthony; Ashley Judd; Molly Ringwald; Gary Coleman; Josh Brolin; Cuba Gooding Jr.; Dodgers Hideo Nomo, Frank Thomas and Mike Piazza.
  • Jimi Hendrix, the Beatles and Led Zeppelin had the best-selling albums.
  • The most popular movies were The Graduate, Funny Girl and Planet of the Apes.

Roger Pondel, rpondel@pondel.com

Celebrating 50 Years

As our firm celebrates its 50th anniversary year, we thank our clients for the trust they have placed in us, and for allowing PondelWilkinson to help enhance value, build businesses and protect reputations.

It has been our privilege to work side-by-side with stellar management teams and boards of directors of companies big and small, established and emerging, global and regional.

When our firm was founded in 1968, it was done with a business philosophy based on four simple tenets: apply sound thinking to meet unique client challenges; attract the best talent, regardless of position; deliver quality, responsive service; and always operate in a respectful and ethical manner. That philosophy has endured.

Today, we pride ourselves on long client and staff tenure, with a collaborative, professional team that is the best in our business.  We are grateful to our referral sources for their confidence in recommending us.  And we extend deep gratitude to a vast network of wonderful people with whom we work every day on behalf of our clients, from investors and analysts, to editors and reporters, lawyers, accountants, and so many others.

Technology has transformed much of what we do, but our core competencies and the scope of our services remain highly focused, grounded in relevant experience: investor relations; strategic public relations; and crisis communications.

Aside from our day-to-day client work, in 2018 alone, we have been privileged to arrange highly successful investor days; stage business/financial media events and NDRs; develop communications for several mergers and acquisitions; and craft delicate, reputation-defining messages regarding a number of highly sensitive matters.

Tooting our own horn is not generally our style. We fully believe it is our role to be the rock, the secret sauce, the foundation behind the scenes, and have our clients shine brightly, center stage. But hitting 50 is a pretty big deal, and we know you will understand and share our exuberance.

So, to everyone we know, thanks for being there for us. We look forward to being there for you for decades to come.

Making the Grade for a Reg A+ Offering

Evan Pondel wrote a story in the May/June 2018 issue of IR Update on Regulation A+ offerings and what they mean for investor relations professionals. You can download a PDF of the story here.  Following are some IR tips for companies pursuing a Reg A+ offering:

  • Ensure that you are telling a story that individual investors will understand
  • Align with experts in public relations and digital marketing
  • Millennial themes tend to generate the most interest with respect to Reg A+ offerings
  • Answer investor questions via live phone conversations, email and FAQs
  • Exercise patience when speaking with individual investors
  • Apply Reg FD and consistent communication whenever telling the story
  • Under promise and over deliver

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

Class Action Litigation on the Rise: How Safe are Safe Harbor Statements?

History has a way of repeating itself. With 2017 statistics of all kinds starting to be compiled, one offered by the Stanford Securities Class Action Clearinghouse should make public company management teams and their boards take notice: the number of securities class-action lawsuits is on the rise … in a startling way.

 

The clearinghouse reported that the number of annoying and costly public company securities class action lawsuits increased to 413 in 2017, up from 213 in 2016, and up from an average of 190 in the years 2002 through 2015.                        

                                            

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Law firm Wilson Sonsini Goodrich & Rosati recently issued a paper highlighting the trend, which can impact companies of all sizes, from micro- to mega-cap. The three biggest reasons for the suits are material misstatements or omissions in registration statements and prospectuses for IPOs; challenges to merger and acquisition transactions, many if not most of which defense lawyers say are boilerplate in nature and meritless; and greater scrutiny by the SEC to disclosures being made by private companies.

 

Disclosures, or lack thereof, in press releases, which are totally in management’s control, often play a role in such lawsuits. While most companies are careful about including safe harbor statements in their press releases, which offer some legal protection, many companies do not use those statements properly. Often, they fail to customize those paragraphs to include the actual forward-looking statements mentioned in the press release. Worse yet, sometimes the safe harbor paragraphs are being included as boilerplate, even when there are no forward-looking statements at all.

 

Remember the term, “You’ve been Lerached?” A couple of decades ago, class action securities lawsuits were rampant, with a San Diego-based law firm, long since shuttered its doors, leading the pack in filing them. The firm’s principal ultimately went to jail for fabricating many such suits, looking for plaintiffs to buy a few shares of a given company, allegedly based on a CEO’s statement about future performance, then at the first sign of non-performance, voila, the company was “Lerached,” with the term affectionately named after lawyer Bill Lerach. Copycats followed.

 

Many of those lawsuits were legit, and they ultimately gave birth to the Private Securities Litigation Reform Act of 1995 and the safe harbor statements in press releases, followed by Reg FD in 2002. But despite the safe harbor protection, a case involving guidance issued in a press release by Quality Systems last July may signal a frightening change: The U.S. Court of Appeals for the Ninth Circuit, which governs California, reversed the district court’s dismissal of a securities fraud suit, saying various aspects of the safe harbor were “hostile in tone and application, when compared to many prior forecasting decisions.”  

 

What does all this mean?  Maybe nothing, but today more than ever, it pays to listen carefully to your SEC lawyer and to your investor relations advisor on all corporate communications matters. It also may be a good idea to place close attention to those safe harbor statements, and be sure to stay tuned as to whether those statements turn out to be not so safe as hoped.

— Roger Pondel, rpondel@pondel.com

 

 

 

Building Better Media Relationships

Media relations are an integral component to what we do at PondelWilkinson, whether a public relations or investor relations engagement.

Crises aside, generating media awareness of corporate entities, their brands, products and services, among readers, listeners and viewers is critical to the success of any communications program.

Shrinking news departments, fewer beat reporters, and an increasingly tighter news hole, however, are making it harder to get reporters’ attention.

Another caveat to these challenges is that only 36 percent of journalists prefer to get their information from PR/IR sources, press releases, and newswires, compared with 42 percent last year, according to the 2017 Global Social Journalism Studycision-global-social-journalism-study

The good news is that experts and industry contacts remain key sources of stories for U.S. journalists. For example, while a reporter may not write about a new app or the latest software version, he or she may be more inclined to interview an executive about key technology trends, such as artificial intelligence or cybersecurity.

Media relations 101, right? Maybe not. According to the same study, only 19 percent of reporters say PR professionals provide high quality content, and just 37 percent are reliable.

Learning what’s important to reporters is vital to establishing long-lasting media relationships, essentially, helping them make their jobs easier.

Follow these simple rules for building successful media contacts:

  • Do your research, learn about the reporter and his or her area of coverage.
  • Customize your pitch, conveying why it’s important to the outlet’s audience.
  • Do not blast pitches.  Just don’t do it.
  • Provide value, such as proprietary content or a unique perspective or point of view.
  • Call first, if possible, especially since reporters are constantly inundated with e-mails.
  • Be transparent to foster credibility.

There’s no easy way to building better media relationships. It takes time, effort and a good sense of news, coupled with knowing what reporters want and need.

— George Medici, gmedici@pondel.com

Twitter’s Double Standard – A Case Study in Crisis Communications

The power of Twitter is unparalleled especially when the “news” is filled with high stakes and lots of drama, such as in the case of movie mogul Harvey Weinstein.

A slew of actresses and female Hollywood A-listers recently have come out publicly corroborating Weinstein’s sexual misconduct, spurred by actress Rose McGowan, whose Twitter account had been temporarily locked after a series of posts about The Weinstein Co. founder’s sexual wrongdoings, including toward her.

Twitter’s reason for locking McGowan’s account was because one of her tweets violated the platform’s terms of service, which included a private phone number. The account was eventually unlocked and Twitter added, “We will be clearer about these policies and decisions in the future.”

Twitter’s action against McGowan prompted much resistance, including a Vanity Fair article alluding to the platform’s hypocrisy, referencing other tweets from the U.S. president and even white supremacist groups. Twitter contends it “will not ban content that is newsworthy or has public-interest value.”

Jack Dorsey, CEO of Twitter in 2016. Photo credit: CNBC

Jack Dorsey, CEO of Twitter in 2016. Photo credit: CNBC

While the story is newsworthy, a technical analysis can see where Twitter may be consistent in its user policy. Needless to say, celebrities are more inclined to make news.

Take actress Alyssa Milano for example. The “Who’s the Boss?” star jumped into the Weinstein fray by initiating a “me too” campaign, tweeting, “If you’ve been sexually harassed or assaulted write ‘me too’ as a reply to this tweet.” The tweet went viral, sparking tens of thousands of engagements, while generating traditional media coverage.

The good news is that Twitter gives anyone the opportunity to participate in the public narrative. The not so good news is that outrageousness, conflict, fortune and fame, is what cuts through the clutter, often leaving lesser known individuals and organizations the silent majority.

Twitter is in sort of a crisis, too. Stories like the Weinstein affair keep the social network relevant and included in mainstream media coverage, although it’s hard to determine if this is having a positive impact on ad revenue since the company’s stock continues to languish since its 2013 initial public offering.

Even though 500 million tweets are posted on Twitter every day from 328 million monthly active users, user growth has slowed or even halted, according to the company’s latest earnings report.

The question remains what’s next for Twitter. For starters, it does in fact need to be clearer about its policies and decisions. An effective issues management campaign might just be what the platform needs to foster more users. Getting in front of this issue is paramount to alleviate any concerns about the platform’s so-called hypocrisy.

Messaging is starting to take shape. Twitter’s founder Jack Dorsey recently pledged to “take a more aggressive stance in our rules and how we enforce them” to safeguard users, particularly women, and in response to a #WomenBoycottTwitter campaign.

And finally, proving Twitter’s relevance in the social narrative to ensure that everyone’s voice is heard, not just high-profile individuals and organizations, may be easier said than done.

— George Medici, gmedici@pondel.com

Read Any Good Books Lately?

I really enjoyed McKinsey & Company’s piece on what CEOs are reading in 2017, which is a continuation of an annual list going back several years.  Not only did it provide interesting recommendations about what to add to my Kindle library, but seeing what’s in the minds of leaders makes them a bit more relatable.  Not surprisingly, the list is overwhelmingly non-fiction, however, I’d recommend more fiction for a bit of escapism, which is likely needed given CEOs daily demands, and because there are some lessons to be learned from non-fiction storytelling.

Some of this year’s titles include:

  • Serial Innovators: Firms That Change the World by Claudio Feser
  • Sun Tzu: The Art of War for Managers: 50 Strategic Rules Updated for Today’s Business by Gerald A. Michaelson and Steven W. Michaelson
  • Good to Great: Why Some Companies Make the Leap . . . and Others Don’t by Jim Collins.  CEOs surveyed by Fortune named this book “the best business or management book they had ever read.”
  • Zen and the Art of Motorcycle Maintenance: An Inquiry into Values by Robert M. Pirsig

I suppose I’m not alone in my interest in lists like these, as several media outlets have reported on CEO reading over the years.  Business Insider noted books like The Remains of the Day by Kazuo Ishiguro as being a favorite of Jeff Bezos who once said that he “learns more from fiction than non-fiction” (I’d note here that I pointed that out earlier in this post before I even saw that Jeff Bezos said it).

Tim Cook took the non-fiction path with Competing Against Time: How Time-Based Competition is Reshaping Global Markets by George Stalk, Jr., and Thomas M. Hout, which he is said to distribute to new Apple employees and colleagues.  The Road to Character byDavid Brooks was cited by Pepsi’s CEO, Indra Nooyi, as providing an understanding that “building inner character is just as important as building a career.”

Rounding out the recommendations, Forbes recently listed Shoe Dog, by Phil Knight, Competing Against Luck: The Story of Innovation and Customer Choice by Clayton M. Christensen, and Who Says Elephants Can’t Dance? by Louis Gerstner, Jr. as popular CEO choices.

Have you read any of these books?  Others you’d like to recommend?  Let us know in the comments section below.

— Laurie Berman, lberman@pondel.com

Media Are People, Too

Veteran journalist Will Bunch touched upon this topic in a recent op-ed, The Day the 'Enemies of the American People' Helped Save America. The Philadelphia Daily News reporter wrote about those media who helped rescue victims of Hurricane Harvey, while responding to repeated criticism of the press.

Veteran journalist Will Bunch touched upon this topic in a recent op-ed, The Day the ‘Enemies of the American People’ Helped Save America. The Philadelphia Daily News reporter wrote about those media who helped rescue victims of Hurricane Harvey, while responding to repeated criticism of the press.

Americans and the press always seem to have a love-hate relationship.

Despite much of the anti-media rhetoric at play within the national dialogue, a fairly good chunk of Americans (72 percent) trust the information they receive from national news organizations, according to the Pew Research Center.

The good news is more Americans are engaged. That means more eyeballs on traditional media, and social, too. In fact, Pew also reported in a recent survey that two-thirds of Americans (67 percent) say they get at least some of their news from social media.

As media experts, we know that human conflict is what makes news. And in today’s highly competitive 24/7-news environment, getting the proverbial scoop is going to be good for both the journalist and their respective outlets.

So, when Hurricane Harvey rolled around, it’s no surprise that millions watched live coverage of the category three-storm barrel through the Gulf Coast. Homes being destroyed and acts of heroism provided much needed drama that kept viewers engaged.

It’s hard to say how far a journalist will go to get a good story. Many correspondents are often confronted with ethical dilemmas of interfering with their own reporting.

Veteran journalist Will Bunch touched upon this topic in a recent op-ed, The Day the ‘Enemies of the American People’ Helped Save America. The Philadelphia Daily News reporter wrote about those media who helped rescue victims of Hurricane Harvey, while responding to repeated criticism of the press.

The fact is media are people, too. They have friends and families and experience life’s challenges just like everyone else.

One former journalist and current staffer says it best, “These days a lot of media outlets are attempting to emote and connect in a provocative way to perpetuate an echo chamber,” said Evan Pondel, president of PondelWilkinson.”

No doubt the media landscape has changed dramatically. News outlets now cater to liked-minded audiences, fueling the country’s already tumultuous divide.

Be that as it may, media are an essential part of documenting the pubic narrative. And yes, they don’t always get the story right. They’re human. But editors and fact checkers help ensure story accuracy.  Let’s also not forget the journalist’s creed, a personal affirmation of ethical standards and to “believe that the public journal is a public trust.”

Our jobs as public relations experts rely on our relationships with the press on behalf of our clients. We understand the difficulties and the pressures that go along with good reporting. We also like to think we add value to their jobs as well.

While it’s easy to complain about the press, just think about what America would be without it.

— George Medici, gmedici@pondel.com