Wednesday, August 02, 2006
Where Was PR?
USA Today featured an article yesterday that focused on entrepreneurs who commit fraud when their bright ideas have run their course. The idea of the piece is that these are people who refuse to admit earnings in their fast-growing companies are no longer what they were, so they make up numbers. There were several examples, all of which you know but worth reading again.
One question occurred to me that wasn't addressed in the article. Where were the PR and IR practitioners? Did they know or have an inkling? Did they go along with the CFO adding a few cents to earnings quarter to quarter to make "the numbers?" Were they as guilty as the senior executives, or were they ignorant?
My guess is that PR practitioners in most, if not all, of these cases were kept in the dark. We aren't allowed to get near numbers because, well, we're "flacks." The IR person? That's another story. They sit in on many of quarter-end conferences, and they see the sausage made.
In both cases, IR and PR are public spokespersons. I can only imagine the feeling of learning one has been lied to for months or years. I also don't know how they could look analysts or journalists in the face as their companies disintegrated. And, as for careers after a company collapses? There is only one safety when fraud occurs. Resign early and get out before one is sucked into the vortex. Bitter-enders gain nothing except deeper understanding of human nature. And, if remnants of their companies survive, bitter-enders are likely to get fired anyway because they were associated with previous management.
Commitment to honesty and transparency is as much self-interest as personal ethics.
One question occurred to me that wasn't addressed in the article. Where were the PR and IR practitioners? Did they know or have an inkling? Did they go along with the CFO adding a few cents to earnings quarter to quarter to make "the numbers?" Were they as guilty as the senior executives, or were they ignorant?
My guess is that PR practitioners in most, if not all, of these cases were kept in the dark. We aren't allowed to get near numbers because, well, we're "flacks." The IR person? That's another story. They sit in on many of quarter-end conferences, and they see the sausage made.
In both cases, IR and PR are public spokespersons. I can only imagine the feeling of learning one has been lied to for months or years. I also don't know how they could look analysts or journalists in the face as their companies disintegrated. And, as for careers after a company collapses? There is only one safety when fraud occurs. Resign early and get out before one is sucked into the vortex. Bitter-enders gain nothing except deeper understanding of human nature. And, if remnants of their companies survive, bitter-enders are likely to get fired anyway because they were associated with previous management.
Commitment to honesty and transparency is as much self-interest as personal ethics.
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