Royal Bank of Scotland’s Hester No Fool

June 17, 2013 by Leave a Comment
Royal Bank of Scotlands Hester No Fool

THE PR VERDICT: “D” (PR Problematic) for the UK government. (Pictured: Royal Bank of Scotland’s Stephen Hester)

Government, it seems, is no match for bankers and executives who run the world’s most powerful financial institutions. The world got another reminder of this on Wednesday when Stephen Hester, Chief Executive of Royal Bank of Scotland, abruptly tendered his resignation. The news might have slammed Hester as another wealthy banker too arrogant to work under government supervision. Instead, Hester left his post like a hero, with lavish praise from the folks who fired him and the admiration of shareholders.

News of his departure sent the stock down, triggered headlines about bereft employee morale, and prompted a Treasury minister to address the UK’s House of Commons with a statement full of hyperbole about Hester’s success at getting the job done.

The reason for the departure? Apparently the government wants to “turn the page” on RBS and divest itself of the business it bailed out. Investors in a privatization deal will not view Hester’s leadership favorably, reckoned the bureaucrats. Instead, so their thinking goes, the market wants to see a leader who represents the future, not the past. Fair enough but for the unanswered questions: Who is Hester’s replacement? And if he’s as good as you say, why show your most capable leader the door? Why not let him help you through the “transition?”

THE PR VERDICT: “D” (PR Problematic) for the UK government for badly mishandling an announcement with a communications strategy that begs many questions.

THE PR TAKEAWAY: Before firing, have a replacement lined up, or suffer the consequences. The RBS privatization has a chance to succeed, but the government just raised its cost of capital unnecessarily by showing the current CEO the door, with no apparent plan for replacement. Once the press statements were finalized and the polite, politic resignation letter released, Hester told the truth that he’d wanted to stay after all. While he got to appear as though he’d orchestrated an effective career transition, Chancellor of the Exchequer George Osborne et al were left holding a bag of empty words. Next time, think before you pink slip.

Royal Bank of Scotlands Hester No FoolPRV Contributor Pen Pendleton is a communications professional with 20 years experience in business and financial public relations. He began his career as a newspaper reporter and now works as a consultant in New York. 

Filed Under: Companies & Markets, Finance, International News, Regulatory Matters Tagged With: , , , , , , , ,

Austere Today, Gone Tomorrow?

April 30, 2013 by Leave a Comment
Austere Today, Gone Tomorrow?

THE PR VERDICT: “F” (Full Fiasco) for the proponents of austerity, who continue to lose a losing battle.

What now for the proponents of austerity? Up until last month it seemed they had won the policy and PR debate. With disciples across Europe and the US, and with Angela Merkel as its high priestess, fiscal restraint was positioned as a dose of much needed tough medicine. The mantra was clear; no pain, no gain. Politically unassailable, this was one helluva PR launch with some influential backers. Over the last month, however, things have become a little more complicated: austerity may have lost its PR claim as a cure all.

Last week, economists at the University of Massachusetts reviewed calculations cited in Growth In a Time of Austerity, the bible for those justifying tightened fiscal policy, as flawed. The claim? The research published in January 2010 by Harvard University included “selective exclusion of available data and unconventional weighting of summary statistics.” The case for austerity is now not so clear.

Since then, austerity seems to be losing more and more PR steam. EU nations are sliding deeper into recession, with unemployment in Spain and Greece topping 30 percent. In Britain, austerity is responsible for a limp 0.3 percent growth, while Germany, the champion of austerity, is teetering on the edge of recession. Has austerity fallen out of fashion? The headlines would seem to suggest that less has not added up to more.

THE PR VERDICT: “F” (Full Fiasco) for the proponents of austerity, who continue to lose  a losing battle.

THE PR TAKEAWAY: Product launches can teach us something about ideological launches. If austerity was a consumer product, it would now be sitting on the supermarket shelves unloved and unwanted. Why? Because not one of its proponents have been able to demonstrate tangible benefits. Despite a big and loud launch, its advocates seem to be retreating into the shadows. Where are the business leaders confirming they are hiring in the face of cutbacks? Without some simple proof points and enthusiastic advocates, this is one launch that might have seen its brief vogue run right out of steam and into the dustbins of economic history.

 

Filed Under: Finance, Foreign Policy/ Affairs, Lowest Graded, Politics/Government, Regulatory Matters Tagged With: , , , , , , , , , , , , , ,

JP Morgan: It May Take Two

April 8, 2013 by 1 Comment
JP Morgan: It May Take Two

THE PR VERDICT: “D” (PR Problematic) for JP Morgan. (Pictured: JP Morgan CEO Jamie Dimon.)

Megabank JP Morgan hit the headlines over the weekend with news that it was mobilizing its senior management to defeat a shareholder vote on corporate governance. In advance of a vote at next month’s annual meeting, board members are planning to sit down with some of the bank’s biggest shareholders, encouraging them to block a motion to separate the role of CEO and Chairman.

Momentum for the proposal has gathered steam following the losses from the London Whale trading episode and JPM’s nearly $6 billion in losses. Fairly or unfairly, questions about the CEO have been raised, and whether or not it is possible to manage a firm of JP Morgan’s size. Following some recent ugly congressional hearings, the new catch cry is not only too big to fail abut also too big to manage. This recent suggestion, to split the current Chairman/CEO role into two is an attempt, so say its proponents, to get another set of eyes overseeing day-to-day management.

The Board of JP Morgan isn’t in favor of the change, while press reports have CEO Jamie Dimon being alternatively sanguine about the proposal or threatening to leave, if the motion is approved. To avoid ongoing external scrutiny and to appease fierce critics in Washington and elsewhere, this may be one battle not worth fighting.

THE PR VERDICT: “D” (PR Problematic) for JP Morgan and its decision to oppose suggested governance reforms.

THE PR TAKEAWAY: Give an inch to keep a mile. It’s not really clear what JP Morgan’s objections are to splitting the role of CEO and Chairman. It is, after all, a structure that is already in place in many companies around the world, and splitting the roles is generally perceived as a desirable safeguard. For a firm that has been dragged through acres of tough media coverage about its internal management controls, this might have been one relatively painless and not unreasonable concession to make. Another financial loss or management failure around the corner, and JP Morgan may rue the day it so vociferously opposed such a modest reform.

Filed Under: Companies & Markets, Finance, Lowest Graded, Regulatory Matters Tagged With: , , , , , , , ,

The PRV Report Card: This Week’s Winners and Losers

March 22, 2013 by 1 Comment

The PRV Report Card: This Weeks Winners and Losers

PR WINNER OF THE WEEK: “A” (PR PERFECT) to the latest online petition. We love the latest petition circulating on the White House’s own website, “We the People” which calls on Congressional lawmakers to prominently display their financial backers and monetary support from various lobbies. Yes, it will make Congressional members look like Nascar participants, but it just might focus their minds when it comes to voting on financial or healthcare reform. Members of Congress would be required to wear the names of their “sponsors” during all official duties, including voting. The size of a logo or name would vary with the amount of a donation. A brilliant idea, giving vested interests no place to hide.

The PRV Report Card: This Weeks Winners and LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) to the European Central Bank (ECB) and its ham-fisted attempt to impose an unprecedented tax on the deposits of ordinary Cypriots without vetting the levy with lawmakers first. The tax, part of a proposal to bail out the small Mediterranean country of Cyprus, sparked demonstrations and forced the Cypriot Parliament to reject the bailout’s terms, causing angst in European, and ultimately world, financial markets. Nobody likes a tax, but the terms may have been easier to accept had the ECB secured the backing of key leaders first. Instead, Cyprus now teeters on the brink of economic collapse. The world watches – and waits to be affected by the consequences.

The PRV Report Card: This Weeks Winners and LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to Michele Bachmann. The Republican Representative for Minnesota is back, and she’s making less sense than ever. In this video, she says Obamacare will “literally kill” women and children. We understand what she meant, but a bill cannot literally kill anyone, unless it is used to inflict a fatal paper cut. Still, it would not be the health care bill itself, but the paper the bill was printed on. That’s more detail on that than Rep. Bachmann gave in her charge against Obamacare. And in her address at the Conservative Political Action Conference, she stated that the First Family lives ” a lifestyle that is one of excess.” Bill O’Reilly pointed out that President George W. Bush had a bigger White House budget. Let no mere fact stop the poor man’s Sarah Palin from making her point – whatever that might be.

Filed Under: Companies & Markets, Featured News Stories, Finance, Media, Politics/Government Tagged With: , , , , , , ,

JP Morgan’s Whale of a Hangover

March 19, 2013 by 2 Comments
JP Morgans Whale of a Hangover

THE PR VERDICT: “C” (Distinctly OK) for JP Morgan. (Pictured: JPM chief Jamie Dimon.)

Stiff drinks for the staff at JP Morgan? A martini or two might have helped ease the pain from Friday’s Congressional hearing in Washington, which examined the firm’s now infamous $6 billion loss known as the “London Whale.” The trade generated not only steep losses but a level of scrutiny from regulators and the media that has had JP Morgan’s management on the hoof for months.

Friday’s hearing was brutal for JPM’s top brass. The list of accusations by the Senate’s Permanent Sub Committee on Investigations was simple enough: a risky proprietary trading strategy, concealing losses, manipulating pricing models, and lying to investors and regulators. Anything else? Actually, yes; the fallout continues as Senate aides are now pondering referrals to regulators and the Justice Department. This was a bad day for JP Morgan, and a very good day for the Senate’s PR machine.

Despite a parade of embarrassing and contradictory testimony, the thrust of JP Morgan’s response remains unchanged: “Management always said what they believed to be true at the time, period. In hindsight we discovered some of the information they had was wrong.” Fair enough, but unlikely to break the momentum on a train wreck of an issue that continues to gain momentum.

THE PR VERDICT: “C” (Distinctly OK) for JP Morgan. A straightforward and expected defense, though it’s unlikely to make much of a difference.

THE PR TAKEAWAY: Life is not always fair. Despite its clout, JP Morgan was always going to be outgunned in a public hearing concerning its embarrassing  losses. The bad news for the firm is that there is little that can be said to disrupt the forward movement on this issue, apart from what they’ve already said. Admitting you got it wrong may not be enough in an environment that continues to be out of love with banks. It will take more critical and remedial changes in management and strategy before the heat is turned down. Until then, another round, please…

Filed Under: Companies & Markets, Finance, Regulatory Matters Tagged With: , , , , , , , , ,

GOP: OK With Sequester, or Not?

March 5, 2013 by Leave a Comment
GOP: OK With Sequester, or Not?

THE PR VERDICT: “F” for the GOP and Republicans for their post sequester messaging.

What, no triumphant headlines or gloating from the GOP? Has it suddenly discovered a new level of modesty? Days after the sequester debate has reached the end of its life cycle, the GOP and Republican politicians seem remarkably low key about their latest political triumph. Puzzling, to say the least.

From the get go, President Obama has been clear: He hated the sequester. A bad and clumsy mechanism to reduce spending that would only hurt middle and low-income earners. Bad for the economy, bad for the recovery. In PR terms, his case was an easy read.

Republicans, on the other hand, made it clear that spending needed to be reined in. This showdown was going to highlight their resolve to cut spending and bring the deficit back in line. But since then, the triumphant tone in Republican communication has been increasingly limp and muddled. House Speaker John Boehner said, “I didn’t like it anymore than anybody else liked it,” while other Congressional peers including Jim Jordan said: “The sequester should happen… That is good.” Sen. Lindsey Graham told the media, “The cumulative effect of sequestration is bad for defense.” So, is the GOP  happy with the cuts or not? What is the official party line – or is there one?

THE PR VERDICT: “F” for the GOP and Republicans for their post sequester messaging. Confusing at best.

THE PR TAKEAWAY: Don’t air your doubt in public. Just weeks ago, GOP messaging was clear: Government spending was out of hand, and the American electorate had handed them a mandate to rein it in. Now that the cuts are in place, the PR messaging is confused and contradictory, playing straight into concerns that the cuts are iron-fisted and potentially damaging to the fragile recovery. What changed in the space of a couple of weeks? Now is the time for the GOP  to revisit and unify its messaging. Public displays of ambivalence in moments like this rarely offers any protection against public reactions of hostility. Without a change, the GOP and Republican Congress is unintentionally poised to take the blame for a later slow-down. Of course, if that was their intention, well, mission accomplished.

 

Filed Under: Featured News Stories, Finance, Politics, Politics/Government, Regulatory Matters Tagged With: , , , , , , , ,

The PRV Report Card: This Week’s Winners and Losers

March 1, 2013 by Leave a Comment

The PRV Report Card: This Weeks Winners and LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to Lynn de Forrester Rothschild. What happens when people turn on their own? That might have been the reaction to the op-ed by Rothschild, chief executive of the famous family’s investment holding company. In the week of the rapidly approaching sequester deadline, Rothschild questioned in Monday’s New York Times the intellectual justification for the “carried interest” exemption that effectively minimizes the tax bill for private equity, hedge fund managers, and investment trusts. Describing the tax exemption as violating basic standards of “fairness and common sense,” she joined the ranks of other financial notables like Warren Buffet by penning a point of view with punch. As calls for spending cuts intensify, this was a timely addition to a debate that continues to stall. In this case it was the identity of the author that made this a PR moment.

The PRV Report Card: This Weeks Winners and LosersPR LOSER OF THE WEEK: F (“Full Fiasco”) to The Onion. As much as we love the biting humor of The Onion, the satirical publication earns this week’s PR Loser Award for its wildly offensive and unfunny Tweet about nine-year-old actress Quvenzhané Wallis during the Oscars. Presumably the Tweeter thought referring to an adorable child (who carried a puppy purse to the awards) as one of the most vulgar words in the English language would be groundbreakingly clever and hilarious. Despite an immediate apology from CEO Steve Hannah, however, the mark was badly missed. In one of the most controversial awards shows ever, The Onion crossed far over the line.

The PRV Report Card: This Weeks Winners and LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to Michelle Williams. If there were presses to be stopped, we’d be yelling that famous line now; if you weren’t already sitting down to read this, please do so. Members of the press, prepare: Actress Michelle Williams has announced that she is growing out her pixie haircut. Yes, yes, we know: shocking. Now, we’re not so busy examining matters of papal shakeups and sequester-related furloughs that we don’t like our media candy as well as the next person. But surely the press junket for Oz: The Great and Powerful couldn’t have been dull enough to warrant this many quotes about the Williams’ do. PRs for the film, take note – and take control of the interviews.

Filed Under: Celebrity, Featured News Stories, Marketing and PR, Media, Politics/Government, Thought Leadership Tagged With: , , , , , , , , ,

The 5 Toughest PR Assignments of 2013

December 21, 2012 by 1 Comment

This week, we’ve been looking back over some of the more challenging moments in public relations, yet they seem simple in comparison to the PR assignments for 2013. We invite our readers to pitch strategies for the following assignments; any takers?

The 5 Toughest PR Assignments of 2013DEFENDING THE NRA: With the Newtown killings, American public opinion appears to have reached the proverbial tipping point. Public discourse now is less about freedom and the constitutional right to bear arms and more about child safety and the appalling level of gun deaths in the world’s largest and most modern society. With over 10,000 gun-related deaths a year, this PR brief is going to need some very creative thinking. The well-worn PR positioning that an armed society is a polite society won’t cut it – nor will the old saw that “guns don’t kill people.”

 

 

The 5 Toughest PR Assignments of 2013REBEKAH BROOKS’S IMAGE REHAB: With Rebekah Brooks standing trial along with a number of other Murdoch employees in 2013, on multiple charges including attempting to pervert the course of justice, getting her image right will be job for Super PR. Continuing to claim that she was blissfully unaware of phone hacking won’t work, as her employer has already compensated numerous victims; her previous protests of innocence will come unstuck if the jury fails to be won over. If that happens, many other questions will be raised about what has been said previously by Murdoch management. Some elegant backtracking may be required; just saying.

 

 

The 5 Toughest PR Assignments of 2013MAKE WALL STREET LOVEABLE: Liborgate, money laundering, financial fraud, trading losses… Making the public like, or even tolerate, the world’s leading investment banks is a constant uphill battle. Just as Wall Street thought it was over the worst, it has been newly dragged into fresh cesspools of scandal and vice. A PR offensive will be needed to fight its corner, resisting calls for reduced bonuses and reining in a risk-taking culture. Given the latest scandals, this is one campaign likely to fall on deaf ears. Good luck.

 

 

The 5 Toughest PR Assignments of 2013AUSTERITY IS GOOD FOR YOU: No one likes being poor, whether government or private citizens. Europe has been told repeatedly that swallowing the equivalent of castor oil is for the greater good, but national patience with “slash and burn” economics is thin to nil. The stagnant economy and economic hardships look set to continue; four years after the financial crisis, European countries are still languishing. If the prescribed medicine continues, it will need some better PR sugar.

 

 

The 5 Toughest PR Assignments of 2013ANNA WINTOUR FOR SECRETARY OF STATE:  The current editor of US Vogue is rumored to be a potential US ambassador to France, or her home country, the UK. A powerful Democratic fund-raiser, the appointment of Wintour, not a politician, would not be without precedent – just look at Pamela Harriman. Wintour’s supporters say she’d find the job “dull”; pal Oscar de la Renta suggested the ONLY official office that would suit Wintour would be Secretary of State. If that’s the case, Anna will need some clever PR to get through the rigorous approval hearings. Our humble PR tip?  Start by removing the sunglasses when indoors.

 

We at the PRV wish our readers a happy holiday season.

We will be back on 7 January 2013. Happy New Year!

 

 

 

Filed Under: Advertising and PR, Celebrity, Companies & Markets, Featured News Stories, Finance, Highest Graded, International News, Marketing and PR, Media, Politics/Government Tagged With: , , , , , , , , ,

US vs. HSBC: Two PR Punches for the Price of One

December 13, 2012 by Leave a Comment
US vs. HSBC: Two PR Punches for the Price of One

The PR Verdict: “A” (PR Perfect) for the US government.

Everybody likes two bites at the PR cherry, and US prosecutors may have had their way when it comes to the latest fines levied against British banking giant HSBC. The headlines that HSBC was set to pay a record $1.9 billion penalty for ignoring possible money laundering came out on Tuesday. The announcement wasn’t official, but mysteriously there it was, hours before the official drop date.

News this big can’t be kept under wraps for long. HSBC was expected to agree to pay $1.9 billion to settle a probe in connection with money laundering from narcotics traffickers in Mexico. Also alleged was that HSBC intentionally allowed prohibited transactions with Iran, Libya, Sudan, and Burma while facilitating transactions with Cuba. Headline-making stuff.

Tuesday’s papers carried front-page stories with astonishing levels of detail, helpfully provided by the very trusty “people briefed on the matter.” Once the news was out, Wednesday ‘s media coverage gave even more detail. “HSBC is being held accountable for stunning failures of oversight — and worse — that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars,” read the official government statement on day two. Not unlike statements from the previous day, only this time it wasn’t attributed to someone “briefed on the matter.”

The PR Verdict: “A” (PR Perfect) to the US government for what seems like a well-orchestrated PR campaign to maximize publicity.

The PR Takeaway: For really big news, use the “Curtain Raiser.” The old PR trick of releasing information the day before the official launch can not only give useful indications of market reactions but, as in this case, allows the headlines to announce the big numbers on day one and stretch the news to a second day by providing more detail. Maximum publicity for the prosecution; as anyone knows, more is better than less.

Filed Under: Companies & Markets, Featured News Stories, Finance, Marketing and PR, Regulatory Matters Tagged With: , , , , , , , , ,

SAC Capital and the Art of Halting an Investor Stampede

December 4, 2012 by Leave a Comment
SAC Capital and the Art of Halting an Investor Stampede

The PR Verdict: “A” (PR Perfect) for SAC Capital. (Pictured: Steven Cohen)

The clock is ticking for SAC Capital Advisors, the hedge fund run by Steven Cohen, now linked to an insider trading case that the government is touting as one the largest of its kind. As regulators are said to be “closing in” on the fund, SAC clients, whose money is managed by the firm, now have 90 days to decide if they’ve had enough and want their money back. Should they redeem, or keep their money there?

SAC, which manages over $14 billion, recently confirmed to investors that the firm might face civil charges over the alleged insider trading scheme that has already led to the arrest of a former employee. Normally, news like this would have investors rushing for the exits, provoking a disastrous run on the fund. But if the firm intends to emerge from its latest legal worries with an ongoing business, reassuring investors while being transparent about its legal woes is the immediate PR challenge.

Not all investors are happy; some have indicated they want to redeem. One French bank has reportedly cashed in its chips already. But other large investors are on the record as saying they will reserve judgment and keep their money with SAC, reiterating their faith in the firm and its management. To SAC investors wavering about what to do, public confirmation from co-investors that their money is staying put is just the sort of signal they’re looking for. At the moment, some clever PR is calming a situation that could otherwise become very risky.

The PR Verdict: “A” (PR Perfect) for SAC Capital. Endorsement from others is always better than tooting your own horn.

The PR Takeaway: If you want the message about you to be heard, let your friends say it. SAC ‘s recent coverage contains a surprising number of reputable and well-known investors confirming that they are sticking with the firm – at least, for the moment. For SAC management seeking to reassure investors, it’s the best sort of message, and one that it couldn’t deliver itself.

To read more, click here.

 

 

 

Filed Under: Companies & Markets, Featured News Stories, Finance, Highest Graded, Legal, Regulatory Matters Tagged With: , , , , , , , , ,
«Older Posts