Do ethical communicators finish first? Walking the straight and narrow information path.

Simply talking a good game when it comes to corporate communication isn't enough. It never has been. Over the past 20 years, communicators have found there are no easy communication answers for avoiding or confronting problems. Yet savvy practitioners realized long ago that there was more to gain over time by walking the straight and narrow information path than by cutting corners and moving into a spin cycle.

Now, however, the stakes are even higher. A commitment to ethical communication isn't just a nice idea or a moral imperative. It has become a critical business driver and a legal requirement. Recent crackdowns on faulty communication practices, along with media consolidation and better-educated consumers, employees and investors, as well as the ubiquitous nature of the Internet, have created this new emphasis.

CHANGING DEMANDS

The ethical shift has done more than change the way we think. It has also placed new demands on communication professionals. They now need to create and maintain more reliable information distribution systems, while also educating senior management to the new communication realities and keeping line employees and middle managers on the proper information track. The task is enormous, but headway has been made.

"Despite all of the bad press companies have received, there has always been a concern regarding ethical communications. People are just paying more attention to it. Now it is on everyone's radar screen," explains Jim Warren, director of communications for Magna International, a global supplier of technologically advanced automotive systems based in Ontario, Canada.

The saving grace for communication professionals is that the critical nature of their work is now more recognized than ever, offering them newfound influence among executive managers. "Twenty years ago companies would make statements and figure their PR departments could fix whatever went wrong. Now we're at the table at the start. We're advising companies not just how to say it, but what to do, and to make them realize this is going to have an impact five to 10 years out," says Charles Snearly, director of communication services and public affairs at Ford Motor Co. in Detroit, Mich., USA.

TAKING A GLOBAL VIEW

Although ethical communication has clearly become a hot button in the U.S., it is anything but a local issue. The swirl surrounding the topic has led to a number of professional organizations worldwide dedicating themselves to addressing the related challenges. Many of these groups, including the Global Reporting Initiative, the Global Public Affairs Institute and The Institute of Business Ethics, go beyond simply discussing ethical communication; they attempt to drive best practices into the workplace.

The newest addition to these groups, in fact, is dedicated solely to advancing ethical communication. The Institute of Communication Ethics (ICE) aims to "formalize the study and practice for the fast growing field" by developing yardsticks to measure success and programs to train professionals. The ICE goes further than most by recognizing that supplying accurate information doesn't begin or end with the communication professional. It extends to virtually all managers and employees.

Despite gains, plenty of work remains. Confusion and even disagreement exist among professionals over how to manage a transparent information process. A recent informal online survey by Communication World found that almost two-thirds of respondents report that their companies do not have a formal written policy on ethical communication.

Approaches are further complicated by the size and location of companies, and even their business segment. Many large companies, for example, work under highly developed communication plans, such as the Japanese firm ITOCHU and multinational energy concern Shell Oil. Yet other multinationals, such as McDonald's Corp. Inc., based in Oak Brook, III., USA, draw guidance for general transparency and honest communication from their mission statements and inherent corporate conduct principles. Some, in turn, simply rely on the relative strength of their communication departments to guide them.

Other studies have found that smaller companies are most likely the ones to lack a written policy, which isn't surprising given their limited resources. Professionals in Europe and Asia go on to note that although companies in their regions recognize the worth of open communication, they are less likely than their U.S. counterparts to embrace formal policies and appoint compliance officers.

Companies operating in several international markets have their own challenges. Keeping the fundamentals in mind helps. "We understand that the laws or regulations are made on a country-by country basis and details of the law differ from one to another," explains Koji Takata, manager of ITOCHU's compliance office. "But we believe that all people in the world acknowledge and understand the basic concept of those laws and that ethics are common."

GETTING IT RIGHT

Global observers are also quick to point out that even those companies with a formal ethical communication policy in place or those that publicly boast of their commitments to open and honest communication can fall short of the grade. "It is very difficult to get an exact handle on the situation," explains Kenneth Campbell, a multinational corporate communication professional who now runs Campbell Communications, a consultancy in Ireland. 'The problem with the whole issue is that everyone is for ethics in principle. But a lot of companies just don't get it in practical terms, which is why it appears they are shading the truth."

What may be more critical to success is securing executive support for a proactive approach. "There are external and internal communications and it is very hard to get either of them right," adds Eleanor O'Higgins, a professor of business ethics and business strategy at Smurfit Graduate School in Dublin, Ireland. "If no one is leading by example, you can't set or adopt a code of ethics."

Officials at Ford agree. They note that their company has had a formal policy in place for 20 years, although executive support is even more critical. "But I bet if you go back to some of the businesses now in trouble, you'd find formal policies in place," Snearly maintains. "So it obviously goes beyond this, It goes to the top. It must come from the culture of the corporation, which is set by its executives."

Communication World's recent online survey also supported this notion. More than 80 percent of respondents, in fact, report that their executive management is either extremely or moderately supportive.

Regardless, getting it right can yield substantial payoffs. Legal demands aside, studies by financial market analyst Standard & Poor's (S&P) found that companies that demonstrate high levels of transparency in their financial filings often reap real gains among lenders and investors. "It has long been a truism that transparency and disclosure, as key components of good corporate governance, are critical to the smooth functioning of capital markets," an S&P report underscored. S&P adds that transparency also reflects well on share price. Its findings suggest that "the market pays a premium for companies that provide more information."

The benefits to the bottom line, albeit difficult to quantify, aren't lost on communicators. "Ethical communications isn't only a good moral idea, it is a good business idea," Snearly asserts. "Get it right, and it becomes a competitive advantage. It can affect the purchase decision by customers or the stock price for investors."

MEETING MEDIA CHALLENGES

Unfortunately, getting it right is harder than ever because of the way news is now gathered and disseminated. Media consolidation, for example, means that fewer journalists now represent a greater number of outlets, which can give a single reporter unprecedented reach and influence throughout an entire media group.

The rise of the Internet is another factor in the news cycle. Information is not only transmitted faster and farther than ever before, it's no longer temporal. Misleading statements or inaccurate reports can now remain forever in this digital library, coming back to haunt companies repeatedly. "Given this, you'd better be certain of what you're saying, that you are willing to stand behind it, because those words are going to be there forever and you're going to have to stand up to them," says Jack Daly, senior vice president of corporate relations for McDonald's Corp.

The Internet also allows customers, partners, suppliers and employees to access a seemingly endless supply of information, allowing them to be better educated and to hold companies accountable for their statements. "The Internet has changed everything," says Warren of Magna International. "News is more prevalent in their lives, in everyone's life. Executives go into an elevator now, and there they see reports from Bloomberg and Reuters running all over the place."

COMMUNICATING SOCIALLY

Another challenge in the ethical communication mix is the extended scope of company activities. Many large concerns, and even some smaller ones, increasingly take on social issues or at least have to chronicle the social impact of their business activities. "Customers demand this now, and we have to respond," explains Robin Aram, vice president of external relations and social responsibility at Shell Oil.

Supplying accurate and transparent information on social issues is central to addressing a company's impact and involvement. In Shell's case, its commitment to honest communication is supported by a highly developed reporting structure that requires a continual flow of related information from various internal divisions that is ultimately distilled for public presentation.

Ford is involved in a similar effort through the Global Reporting Initiative, which is supported by a range of corporations and agencies to develop specific guidelines for reporting on economic, environmental and social activities, as well as products and services. "When you make this type of commitment, it forces you to go into your operations and really assess how they are doing to put a specific number on things. It puts teeth into the process and into communications," explains Snearly.

Policies and procedures help, as do training programs and executive pronouncements. Yet, ultimately, it comes down to common sense, leadership and basic honesty. "You can't over-communicate," notes John Alexander, president of the Center for Creative Leadership, a research and educational institute in Greensboro, N.C., USA. Alexander maintains that it doesn't matter if a company is dealing with its employees or its customers and suppliers. "They are different sides of the same coin."

Companies need to present "clean and open information." And when there is a problem, "don't hide stuff," he says. Moral issues aside, there is little profit in disinformation. Chances are the bad news will surface sooner or later, and when it does, companies stand to lose more by concealing a problem than revealing it quickly and honestly.

Besides, it's the ethical thing to do.

RELATED ARTICLE: NO ROOM TO MANEUVER--MAKE THE BEST OF IT

Contrary to preferred popular belief, ethics isn't black and white--it's many shades of gray. For the communication professional, this doesn't mean there's more room to maneuver; it usually means there's none.

In today's post-Enron environment, every wrong move by a corporation can be magnified and sometimes even distorted by special interest groups, the media, academics and other so-called experts.

For example, following revelations resulting from his divorce battle, Jack Walsh, former CEO of General Electric, has frequently been lumped into the same category as Enron's Kenneth Lay and Tyco's Dennis Kozlowski.

Is it fair that Walsh's luxurious retirement perks elicit the same degree of outrage as the accounting scandals linked to Lay, or the fraud charges against Kozlowski?

Walsh was initially--and some would say, justifiably--defiant. But chastened by negative reaction to his defiance, Walsh subsequently wrote a column in The New York Times saying that he would pay for the perks: "In these times when public confidence and trust have been shaken, I've learned the hard way that perception matters more than ever."

Perception matters more than ever indeed. Because PR is too often only about creating the right perception in this environment of distrust, business communicators must try harder to ensure that there is substance behind their message.

For decades, "corporate social responsibility," or CSR, has been the favourite bandwagon for corporations to demonstrate their ethics and win trust. But veteran observers of the CSR movement, such as Milton Moskowitz, co-author of Fortune magazine's annual list of the 100 Best Companies to Work for in America, has reluctantly concluded that CSR has just been a public relations smokescreen.

"Looking over the history of corporate social responsibility, I can see it as consisting of 95 percent rhetoric and five percent action. Companies are adept at drawing up high-sounding mission statements. Changing the way they do business? That's something else," wrote Moskowitz in Business Ethics.

Gone are notions that the Enron scandal would blow over within a year, and cynical corporate leaders are now accepting the need to do more than put up public relations smokescreens--empty proclamations or a CSR campaign designed just to score some PR points won't cut it.

Our culture has changed, and corporate culture must change with it. Ultimately, the responsibility begins with the CEO, but it does not end there.

Leadership by example isn't enough. To be able to withstand scrutiny from the outside, any organization must live and breathe a consistent standard of ethics from top to bottom.

For business communicators, corporate culture in today's environment can make the difference between doing issue management or crisis management; between promoting the brand or defending the reputation; and between being heard or being trivialized.

Communicators must be vigilant for corporate behavior involving rationalizations that make them uncomfortable-chances are that the rationalization may not fly with your stakeholders either.

Buy-in from employees at every level of the organization is also essential. Employees can be your organization's best ambassadors or worst detractors; they can also be an excellent source of information and feedback on what works and what doesn't. Communicate and enforce your organization's code of ethics at all levels of the organization. If the code of ethics doesn't have credibility with employees, create a code that involves employees in the process.

And if anyone still believes that he can get away with ducking the issue or settling for superficial PR, just remember that part of Enron's successful brand, emblazoned on everything from T-shirts to buildings, were four words: "Respect," "Integrity," "Communication" and "Excellence."

--Dean Williams is president of Williams Savvy & Associates, Strategic Communications Counsel, [e-mail]. This article is adapted from "Between a rock and a hard place?" which originally appeared in the IABC/Toronto publication, Communicator.

THE EASY EIGHT

* Establishing formal, written policies on ethical communication won't guarantee honest, transparent and effective corporate communication. But it can help focus a company's attention on its inherent communication strengths and weaknesses.

* Executive buy-in and support of any ethical communication program is critical for the effort's success. It is equally essential that executives lead by example.

* Establishing policies and identifying the need for ethical communication is only half the battle. Companies need to drive best practices on communication into their operations. A growing number of professional organizations can help.

* Responsibility for ethical communication isn't limited to high-level executives and communication professionals. It is the responsibility of every employee and manager.

* Companies need to concentrate equally on internal communication and external communication.

* Communication professionals should leverage their newfound influence to help their companies proactively address the issues surrounding ethical communication.

* Communicators must come to grips with the new challenges that spring from media consolidation and better-educated consumers, competitors and suppliers as well as the Internet.

* Rewards for effective ethical communication come in many forms. They include higher employee morale, greater productivity and moral capital in the business world. Benefits also include easier access to capital markets and generally better support of share prices.

ROBERT L. DILENSCHNEIDER, a public relations veteran and a former president and CEO of Hill and Knowlton Inc., in founder of The Dilenschneider Group based in New York. He is a frequent commentator on strategic public relations and the author of eight books. He can be reached at +1 212.922.0900.

JOHN SALAK, a principal at The Dilenuchneider Group, is an award-winning journalist whose 20-year career in the fluid included work with Gannet, McGraw-Hill, CMP Media and Fairchild Publication. He is author of five bunks and can be reached at [e-mail].