Accredited in Public Relations (APR) news
THE KING III REPORT by Alice King APR
The King III Report underlines the importance of good corporate governance and continually highlights the unbroken chain that links ethical leadership, company strategy and sustainability.
Discuss the Public Relations Manager’s critical role as a communication strategist with reference to PRISA’s definition of public relations, with specific reference to the managing of strategic relationships with internal and external stakeholders within the King III framework
The Public Relations Manager’s Critical Role as a Communication Strategist
The definition of Public Relations according to PRISA is:
“The Management, through communication, of perceptions and strategic relationships between an organization and its internal and external stakeholders.”
It is known that when a company’s/business’ image is good, stakeholder perceptions and responses are better to manage. A company which shares good and positive perceptions with its stakeholders, usually faces less difficulties in communicating with its stakeholders. Public Relations programs and activities should not be spontaneous and impromptu but instead should be planned, organized, implemented and monitored for effectiveness.
Who or What is a Communication Strategist?
A Communication Strategist is someone who understands communication objectives and is skilled at written and verbal communication. Great communication skills are vital to a business because they affect productivity and success. A Communication Strategist will find new ways of making language work better for the business and helps it in getting the most out of communication channels, such as the internet, email, presentations, telephones, newsletters, etc. He or she looks at ways of using these and the kind of messages that will be sent out bearing in mind that the way one writes and speaks affects the way in which people will receive and respond to the message. A Communication Strategist analyses the use of language and communication channels, identifies what areas can be improved and outlines a strategy to implement changes. He or she will work closely with the directors of the company and senior staff as the communication strategy relates to the very core of how the company communicates with its stakeholders.
What is the purpose of a Communication Strategy?
The purpose of a Communication Strategy is to help an organization to communicate effectively and to meet its core objectives. It acts as a reference and guide for those using it in their work and shows how effective communication can help a company to engage with its stakeholders and manage perceptions. A communication strategy clearly reflects on, and outlines the following:
- The overall organizational plan
- Its overall vision and core objectives
- The key messages that the company wants to convey
- A detailed description of the company’s audiences; internal and external
According to the King III Report, “companies should develop strategies and policies to guide their activities in becoming and remaining good corporate citizens.”
The board of a company provides corporate governance, managing the relationships between the management of the company, its board, its shareholders and other relevant stakeholders. There should be a charter in place setting out its responsibilities.
The Public Relations Manager works closely with the Board, Directors and Senior Management of a company and actively participates in ensuring that the company is seen to be a corporate citizen. The Public Relations Unit becomes the lifeblood of the company with the PR Manager being appointed as the spokesperson of the company.
The overall role of the Public Relations Manager includes:
- Strategically planning, administering and evaluating public relations programmes
- Shaping the underlying conditions of organizational excellence; culture and structuring
- Having a professional base of knowledge and being an ethics counsellor and an internal advocate of social responsibility
- Helping an organization to interact with the social, political and institutional components of its environment
- Participates in strategic decision-making to help manage the behaviour of the organisation
- Participates in management decision-making to identify consequences that create stakeholders
- Uses communication to cultivate relationships with strategic publics
- Managing relationships with stakeholders for mutual benefit
- Measures the quality of relationships
- Influences management behaviour
Corporate governance requires effective and responsible leadership to ensure that the company is run ethically in a transparent and accountable manner. A stakeholder approach to corporate governance looks after the interests of all the company’s stakeholders, thus ensuring the cooperation and support of all stakeholders on which the company depends for its sustainable success. In this way the company creates trust between itself and its internal and external stakeholders. Stakeholders entrust the company with its licence to operate.
The ethics of governance requires that all decisions and actions of the board and executive management are based on the following four basic ethical values that underpin good corporate governance:
The Public Relations Manager plays a critical role in assisting the board and directors of a company in ensuring that the company’s reputational risk is protected.
External perceptions of a company are affected by the level of risk it and by the way its risks are managed. Reputational risk can be the biggest risk faced by a company as it undermines the confidence of shareholders. Reputational risk is greatest in those areas where the company claims to have distinctive competencies, and is thus closely aligned to its capacity to implement strategy. The effective management of risks can improve the company’s overall credit rating, which includes its ability to raise funds and the price of funding, and to favourably affect the value of its shares over the long term.
Intangible assets such as brand value and reputation, goodwill; stakeholders and shareholder value; and customer loyalty/retention value often exceed the value of tangible assets. Business scandals have in the past demonstrated how important it is to build, maintain and defend the company’s reputation.
Reputation is associated with behaviour and performance of the company over time and how this is communicated to the various stakeholders. The value of a company’s reputation is not only measured in monetary terms, and includes value in the broader concept including value to the community and trust. A good reputation has both intangible benefits. It is known, that companies with better reputation attract more and better candidates for employment and can gain essentially free press coverage that is worth as much if not more than advertising and accrue other benefits that actually contribute to profits. Reputation adds value to the actual worth of the company.
The reputational value of a company can be influenced by the performance and behaviour of the business components and employees but tends to be subject to damage as a result of external events. Companies are the most vulnerable to reputational damage if the problem relates directly to what the stakeholders perceive to be the company’s core responsibility.
Reputational damage is one of the key risks facing modern companies and is one of the few threats that can destroy a company’s ability to continue operating.
Stakeholder expectations are increasingly focused on how the company performs and the effect the company has on its community. A company’s reputation can therefore be significantly damaged if these expectations are not met. Stakeholder expectations need to be managed and cannot be ignored.
The essence of sustainability risk management is to protect the value of the company’s intangible assets combining various elements of the risk management into a sustainable and economic enterprise risk management system.
The Public Relations Manager should determine the extent to which risks relating to sustainability are addressed and reported on. Sustainability issues have significant effects on the economic value of a company.
Risk Management being the practice of identifying and analysing the risks associated with the business and where appropriate taking adequate steps to manage these risks, is inseparable from the company’s strategic and business processes. The company’s management should be responsible for the implementation of the risk management process as well as monitoring and integrating it into the day-to-day activities of the company. Risk assessments should be performed on an ongoing basis and the following should be taken into account:
- Stakeholder risk
- reputational risk
- compliance risk in relation to legislation with a significant effect on the company
- ethics risk
- sustainability issues pertinent to or affecting the business of the company
- the company’s activities with regard to corporate social investment, employment equity, BEE, skills development and retention
- whether it has the human and financial capital to sustain its activities into the future.
Internal audit should provide independent assurance on the risk management process.
Stakeholder Management - Managing Strategic Relationships
A stakeholder is any individual, group or organization that can affect, be affected by, or perceive itself to be affected by a programme.
Stakeholder Management is defined as the systematic identification, analysis and planning of actions to communicate with, negotiate with and influence stakeholders. it is the process of managing the expectation of anyone that has an interest in a project or will be effected by its deliverables or outputs and is a critical component to the successful delivery of such project, programme or activity. It is a process and control that must be planned and guided by underlying principles.
Effective Stakeholder Management creates positive relationships with stakeholders through the appropriate management of their expectations and agreed objectives.
An organization’s stakeholders include the following:
- Local Communities
Every company operates in a community. The relationships between a company and its local communities is of paramount importance because the members if the local community may be involved in the company as employees, customers and the like. The company’s treatment of the local communities affects its reputation. Companies should avoid situations that could create a conflict of interest that could present themselves in a variety of ways, be it political or otherwise. Companies should provide support in enhancing the lives of local communities and promote various local opportunities. A company’s involvement in local communities is best described as good corporate citizenship.
Customers comprise individuals, companies, state and other authorities, as well non-profit organisations that purchase or procure goods and services or finance from the company.
Indirect customers could include intermediaries such as agents, non-profit organisations which form part of the company’s promotional activities and might distribute free or subsidised products.
Media relations involve managing relationships with the media – media includes the writers, editors and producers who contribute to and control the reporting that appears in the print, broadcast and online media. It is important that communicators feel free to pass along to senior management negative comments and questions without fear.
A regulator may be defined as a body that seeks compliance either on a voluntary or mandatory basis with a set of rule, or regulations or a code. The company should identify any regular that jurisdiction over its operations. It should conduct both international and domestic research preferably before it commences operating in order to avoid regulatory sanctions.
It should be always clear who the company may contact at the regulator and queries should be logged.
The company’s stakeholder policy should recognise the government as a stakeholder and should address in particular the company’s duties to comply with the law.
- External Auditors
- Potential Investors
The Public Relations Manager as a Communication Strategist therefore, plays a critical role in ensuring the proactive management of the company’s relationships with its stakeholders through effective communication. The communication should be relevant and material.
The question is not only about what is communicated to stakeholders but also how well that information is presented so as to maximise the reader’s understanding. Focusing on the result of the communication from the perspective of stakeholders should assist in avoiding jargon, in using simple and understandable language, and in ensuring the relevance and materiality of the issues communicated. In order to effectively communicate and engage with stakeholders, information should be shared openly and transparently.
The PR Manager should assist the board and directors in ensuring that the trust and confidence of the stakeholders in the company is maintained. The need for transparency includes the imperative for honest and open engagement and this requires communicating the positive and negative effect the company has had on its stakeholder.
The PR Manager’s effective communication about the goals and strategies of the company, as well as its performance with regard to economic, social and environmental issues, also serves to align the company with the legitimate expectations of stakeholders, and at the same time, obtain stakeholder buy-in and support for the objectives that the company is pursuing. This support can prove to be invaluable during times when the company may need certain approvals, authority, support or when it needs and relies on the confidence and loyalty of customers.
Effective reporting should also take into account the specific needs of the different stakeholders in content as well frequency and the mechanism used and should take place at least once a year in an annual report.
Effective reporting means proactive and transparent communication and engagement with stakeholders on all material matters affecting the company. Transparent and effective communication is important for building and maintaining relationships. The need for transparency should be considered in the light of legal requirements, the maintenance of the company’s competitive advantage and access to information.
Reports for shareholders should present a fair and objective assessment of the activities of the company. Reporting should be integrated across all areas of performance, reflecting the choices made in the strategic decisions adopted by the board and should include reporting on economic, social and environmental issues.
As with financial reporting, there is a need for credible sustainability reporting to both internal as well as external stakeholder. Sustainability reporting and disclosure should be formalized as part of the company’s reporting.
According to the King III Report, sustainability reporting should be focused on substance over form and should transparently disclose information that is material, relevant, accessible, understandable and comparable with past performance of the company. Successful companies recognise that the principle of transparency in reporting sustainability information is a critical element of effective reporting. Information provided has allowed stakeholders to understand the key issues affecting the company as well as the effect the company’s operation has had on the economic, social and environmental wellbeing of the community both positive and negative.
The company has the primary duty as a matter of good corporate governance to manage the relationships with its stakeholders, the stakeholders also should, where possible accommodate the process.
A stakeholder-inclusive corporate governance approach recognises that a company has many stakeholders that can affect the company in the achievement of its strategy and long-term sustained growth.
The stakeholder-inclusive corporate governance approach also aims to stimulate appropriate dialogue between the company and its stakeholders. Such dialogue can enhance to restore stakeholder confidence, remove tensions, relieve pressure on company reputation and offer opportunities to align expectations.
The structured process of engagement between company and stakeholders, including structured timeframes for questions and responses, could reduce the risk of confrontation, could prevent tying up the board in constant interventions with stakeholders and could mitigate against mischievous action by competitors.
An inclusive corporate governance approach enables the company and its stakeholders to adopt a collaborative approach – one that will promote reciprocal trust and respect between the company and its key stakeholders.
Responses from customers can be expected where the company does not act in a responsible manner or where the product or its use is:
- harmful to the environment
- derived through employee working conditions outside reasonable norms, e.g. use of child labour
- produced without taking into account diversity and equal opportunity situations or
- harmful to the health of customers.
The Public Relations Manager in his/her role in Managing Stakeholder Relationships would perform as follows:
- Promotes mutual respect between the company and its stakeholders. If a company and its stakeholders in general adhere to the same quality of corporate governance, mutual respect will be a natural consequence.
- Assists the board and directors from time to time in identifying important stakeholders relevant to the company’s long-term sustainability. These stakeholders could include not only stakeholders who could enhance the wellbeing and sustainability of the company and also stakeholders who could affect the reputations of the company.
- Identifies mechanisms and processes that promote enhanced levels of constructive stakeholder engagement. The board should identify mechanisms and processes that can support stakeholders in constructive engagement to ultimately promote enhanced levels of corporate governance.
- Determines the most effective mechanism through which the company will engage with stakeholders. These may include meetings with stakeholders as well as distribution of written reports when necessary or the use of electronic media such as the company’s website.
- Reports on an annual basis on its dealings of the company with its stakeholders and the outcomes of these dealings.
- He/she is mindful that the company’s communication are timeous and the methods of communication are easily understandable for the target market with all the facts both positive and negative. Both positive and negative effects on the company arising out of an issue should be published.
- Considers whether it is appropriate to publish a list of stakeholder groupings which the company intends to deal with on a proactive basis and the method of engagement.
- Considers not only formal processes of communication, such as annual general meetings and liaison with representatives but also considers informal processes such as direct contact, websites, advertising, or press releases. Regardless of the means of engagement, communication with the various groups is important.
- Takes into account the fact that stakeholders’ interests in the company could change and so should re-examine the interests of such stakeholders at appropriate intervals.
- Together with the board and directors, takes into account the legitimate interests of stakeholders in company decisions.
- Considers from time to time whether it is appropriate to publish the company’s stakeholder policies and if it is in the best interests not to publish them, should consider whether, apart from any legal requirements, it would be to disclose all or any of them to any stakeholders on request.
- Having identified the company’s key stakeholders and the related interests should develop a strategy and suitable policies of how the company will manage its relations with each of those stakeholder groups.
- Ensure the equitable treatment of the company’s shareholders.
- Assists the company in creating and maintaining the trust and confidence of its various stakeholder groups.
- Encourages directors of the company to share information with all stakeholders
- Strives to achieve the correct balance between the company’s various stakeholder groupings in order to advance the interests of the company and takes into account the legitimate expectations of its stakeholders in its decision-making.
- Develops a close stakeholder network which can provide the company with valuable information about stakeholders’ views, external events, market conditions, technological advances or trends or issues. This can help the company anticipate, understand and respond to external changes more efficiently, enabling it to deal with problems more effectively.
- Guides the company towards taking a long-term vision rather than relying on short-term expedience in consideration of stakeholder relationships.
The role of the Public Relations Manager and his/ her department should not be subordinated to Marketing or other Management function. The PR Manager can be seen as the chief advocate for the company. He/ She is the mouthpiece for management and must focus all energy on building an organization that will be deemed a good corporate citizen.
Public Relations should be recognized as a bridging activity to build relationships with stakeholders rather than a set of messaging activities designed to buffer the organization from stakeholders. The PR Manager pprovides publics a voice in management decisions and facilitates dialogue between management and publics. It is an ethical obligation for an organization to engage in dialogue with publics when it has consequences in publics. All communication programs should be integrated into or coordinated by the public relations department or a senior executive with a public relations title.
The critical role of the Public Relations Manager as a Communication Strategist necessitates the following skills and qualities:
Communication skills. Managers deal with the public regularly; therefore, they must be friendly enough to build rapport and receive cooperation from their media contacts and donors. The public relations manager crafts communication policies and oversees the development of all statements and news releases for the company. Sociology, psychology and good journalism are requisite talents for the manager and staff. Communication must be clear, concise and relevant to the audience.
Leadership skills. Public relations and fundraising managers often lead large teams of specialists or fundraisers and must be able to guide their activities.
Organizational skills. Public relations and fundraising managers are often in charge of running several events at the same time, requiring superior organizational skills.
Problem-solving skills. Managers sometimes must explain how the company or client is handling sensitive issues. They must use good judgment in what they report and how they report it. The public relations manager is the ultimate spin doctor. It is her job to put the best face on news and information that could embarrass or malign the company's reputation. Often, she will be called upon to polish mundane information into platinum data that gives the company more credit than would ordinarily be due for routine accomplishments.
Speaking skills. Public relations and fundraising managers regularly speak on behalf of their organization. When doing so, they must be able to explain the organization’s position clearly.
Writing skills. Managers must be able to write well-organized and clear press releases and speeches. They must be able to grasp the key messages they want to get across and write them succinctly in order to keep the attention of busy readers or listeners.
Opinion Maestro. The public relations manager directs all outreach efforts. He is responsible for media placements and coordinating organizational functions and the efforts of executives. It is his responsibility to determine the executive appropriate for each situation and ensure that person has approved information and statements in hand.
Whether a company is public or private, profit or non-profit, its reputation will determine its ultimate success. Public opinion can change quickly and to keep things running smoothly and maintain the organization’s reputation, the Public Relations Manager must wear many different hats.