News that Centrica has made profits of almost £1bn just days after its British Gas subsidiary announced price rises of up to 35 per cent, raises some questions about public relations and social responsibility.
The company’s public message is a classic Milton Friedman response (ie it is the social responsibility of business to make profits). Centrica states that the company pays taxes and is reinvesting in the future of the business (as well as paying stakeholder dividends).
Although it also makes an argument regarding lower profits for British Gas Residential (still amounting to £166m), Centrica’s “upstream businesses have benefited from higher gas prices, which have been driven up by record world oil prices”. Consumers are unlikely to make such a distinction when faced with trying to cover increased bills this Winter – as representative groups have already stated.
The Child Poverty Action Group is quoted as saying “Companies providing basic services to people who are often very vulnerable have a social responsibility which goes beyond their duty to their shareholders.”
Naturally, Centrica has a CSR policy based on a principle that “structured engagement with all relevant stakeholders is fundamental to the way we do business. It helps to build trust, demonstrate transparency and to identify risks and opportunities.” The company claims:
Dialogue with stakeholders: It is essential that we are alert to evolving trends and opinions – among employees, customers, policy-makers, investors and wider stakeholders – so that we can fully understand our impact on society and the environment and contribute our expertise and experience to public debate.
But, unsurprisingly, the Friedman approach outweighs the stakeholder engagement one here. In PR terms, the Grunig ‘ideal’ supports stakeholder engagement and dialogue – and Centrica’s CSR policies demonstrate that approach. But the public statements reflect a more directive, capitalist philosophy – one where PR is on the company payroll to best achieve the commercial aims of its paymasters. This might be okay if the other aspect of Friedman’s argument was supported. He stated that
On the level of political principle, the imposition of taxes and the expenditure of tax proceeds are governmental functions.
Organisations such as Centrica and British Gas have considerable PR functions – but PRWeek reports they lack the ability to understand how their mixed messages will be perceived. NewsBiscuit takes a satirical approach whilst the FT notes “spin and hot air” stating this is:
A perfect example of when good financial PR is terrible consumer PR
I am surprised PR professionals would believe they can easily separate communications by stakeholder group, especially where customers may also be shareholders or employees, for example. They should also recognise active publics will form across stakeholder groups.
In questioning the role of the PR practitioner, and any genuine influence in the boardroom, I am reminded of a great post by Literal Mayhem that PR’s Secondary Lies and Tacit Approvals are Lies All the Same, where PR practitioners are called out:
We run off at the mouth about how we are “strategic advisers to the executive suite,” how we “add value to the organization,” how we promote “integrity and authenticity.”
The public impression of PR is that it is “either ineffectual or complicit”. So are we really ignorant of what is going on in our organisations? You may argue that PR practitioners are only responsible for corporate communications and so their partisan position is to present messages. Indeed, it is arguable whether many in PR have the business knowledge to fully question decisions on the basis of their impact on public opinion, corporate reputation or even long-term profitability. Could they credibly present alternative strategies?
Regardless of whether they sit inside or outside the boardroom, the PR team appears to comprise communication technicians with little influence over what is to be communicated, but called upon to use skills to craft a message to cause the least damage.
I’m not being naive here – one of the most interesting exercises I use in my CIPR Diploma classes when considering CSR is an adaptation of the Red:Blue game (or the Prisoner’s Dilemma – Golden Balls if you prefer).
The game involves two organisations facing common PR dilemmas deciding whether or not to cooperate. One organisation has a clear belief in CSR; the other is more hard nosed. The game plays out in different ways, but always the company which has strong values needs to consider survival over being nice.
It is clear companies need to make profits if they are to survive and continue to benefit society even at the basic level. Many however, want to have a reputation for being socially responsive not just delivering on the lowest level of public expectation.
PR practitioners eagerly bought into the CSR philosophy, maybe genuinely or maybe cynically, seeing it as a way of getting a positive reputation for organisations. At the same time, they could feel good about the role of PR as engaging stakeholders and giving to society.
But the real test of such values is when times are tough. Are PR practitioners able to challenge senior executives in respect of walking the talk? Or will they find the budget for CSR initiatives cut, with the community coming second; nice to do, not essential for the business?
If we want to change the perception of PR to be an organisation’s “social conscience” engaged in demonstrating a genuine value to society of companies (as Time magazine claims), we cannot simply revert to crafting press releases that attempt to turn a pig’s ear into a silk purse.
The current economic climate will present challenges to PR practitioners in respect of whether their organisation is facing tough decisions owing to reduced profits (as per British Airways) or public outrage over generating profits at this time as in the case of Centrica and the oil giants.
The question is whether PR can step up and be counted in the boardroom or if practitioners will hide at the keyboard simply called upon to craft unconvincing messages.