Over the 40+ years I have plied my trade as a public relations professional and educator, I have witnessed countless examples of organizations wrestling with the consequences of their actions.
No company is immune from scandal. In the best of them, there is a seasoned public relations counselor on the executive team to help craft an effective response – sometimes over the objections of the legal department.
I once advised the management of a company embroiled in a financial meltdown to include an apology in its public statement. The general counsel refused, saying that an apology could be interpreted as accepting responsibility – and liability. In the end, the company was held responsible and liable and paid a steep price. Long after it could do them any good, they apologized – in a congressional hearing.
Sometimes people just want to hear the words, “We’re sorry.” I have always believed that in the early days of the Watergate Scandal, President Richard Nixon could have nipped it in the bud by acknowledging that some rogue staffers acted unlawfully; firing John Ehrlichman and Bob Haldeman (which eventually he did when it was already too late); and apologizing. I believe he could have finished his term.
But what if you are not sorry?
What if you are so unconcerned about public reaction to your actions that you never spend a minute thinking about “doing the right thing?”
I thought about this as I read ProPublica’s exposé of consulting giant McKinsey & Co. ProPublica documented that the Food and Drug Administration (FDA) hired McKinsey to help them develop a policy for opioid regulation. In taking on that engagement, McKinsey didn’t bother to inform the FDA that it was simultaneously counseling two big opioid manufacturers – Perdue Pharma and Johnson & Johnson – about how to get out from under any FDA regulation.
As ProPublica reported, “McKinsey consultants helped Purdue and other opioid producers push the FDA to water down a proposed opioid-safety program. The opioid producers ultimately succeeded in weakening the program even as overdose deaths mounted nationwide.”
In a written statement cited by ProPublica, McKinsey said, “We take seriously our commitment to avoid conflicts and to serve the best interests of the FDA.” How can we take seriously McKinsey’s comment that they take seriously their commitment to avoid conflicts when their behavior is so clearly and demonstrably conflicted?
There was no apology because McKinsey deemed that none was needed. Nothing to see here, folks, move along.
In other news, The New York Times has reported that five major accounting firms – PwC, Deloitte, EY, KPMG and RSM have a “revolving door” between the firm’s tax departments and top positions at the Treasury Department. (Full disclosure: From 2011 to 2014, I served as Managing Director of Public Relations at PwC.)
The Times article told of a Deloitte tax lawyer who sought to water down proposed Treasury Department rules intended to end a tax shelter created by his firm and used by other accounting firms for their clients. A few weeks later, he joined the Treasury Department and his office issued new regulations incorporating the changes he had sought while employed by Deloitte. He soon returned to his old firm and was immediately promoted to partner.
The article was devastating. The Times identified more than 30 examples in which employees of big accounting firms left to join the Treasury’s tax policy office or other government positions. They then returned to the same firm. Many were promoted to partner when they rejoined their old employer, which The Times notes “often means a doubling of their pay.”
You would think that each of these firms would be in a race to see who could issue the most anodyne pablum about their commitment to avoiding conflicts of interest.
In fact, none of these firms has responded at all. They evidently feel that they have done nothing wrong so why comment, let alone apologize?
What they have learned is that few people seem to care about these companies. Their boards of directors (or whatever governance structure they have in place) do not hold them accountable, and the public has grown so inured to scandal that these stories disappear in a single news cycle. It appears that these firms have come to see themselves as impregnable. Invincible. Untouchable. Maybe they are.
If you happen to have the misfortune of being the head of PR at McKinsey or any of the accounting firms, it would not be surprising if it were hard for you to get out of bed each morning.
Indeed, why should the leaders of these firms even have PR departments if they believe that they answer only to themselves and those few they choose to enrich through their unethical – and possibly unlawful – behavior?
Categories: Random PR Thoughts