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Meet the press

Melanie Stern is section editor of Families in Business magazine

Engaging with the media is no longer a choice for family businesses – it's essential 

The family business relationship with the media hasn't always been the easiest but, let's face it, people read the papers and mud, if left to its own devices, can stick. There is nothing quite like the promise of a rich family's livelihood going to the wall to enflame the mainstream press. What commuting professional with a mortgage to pay or celebrity magazine-devouring 20-something doesn't want to read the dirty laundry of the upper echelons?

Until recently, a common press policy of large family businesses was stonewalling, but no company with shareholders to appease, clients to retain, a reputation to protect or financial regulators to convince can afford to ignore the impact of good and bad press. Family-owned companies in particular (wholly private or publicly-traded) must accept that they provide the journalist with the 'human element' by their very nature and that their public profile, or lack of, affects their business and needs to be actively managed.

Most family businesses now either employ in-house corporate communications professionals or refer the media to an external PR agency. This can be supplemented with written corporate profiles, financial reports, press releases, right down to corporate philosophies, the family 'credo' and (sometimes unfairly but inevitably riled) company promises. Almost all recognised companies in business use a website for media and investor accessibility; but a combination of widespread media coverage from newswires to quarterly magazines, expert comment, corporate research and public intervention from regulatory bodies creates a profile that may or may not be accurate.

"A single source of information no longer exists," says Richard Edelman, CEO of family-owned PR and branding giant Edelman. "A company's communications must be built around the sphere of cross-influence and made up of many interdependent stakeholders including employees, media, investors, consumers and regulators. Information 'pings' between them and must be updated constantly."

In an era of broken trust, efforts incorporating communications and press to create transparency by both private and public organisations go a long way in corporate reputation and social responsibility risk. These are hot topics as long as leading corporates, such as family-owned Adelphia and Parmalat, continue to surrender to accountancy fraud scandals.

"It's difficult to quantify the financial impact that industry trust has on individual firms, but leading companies must address any concerns by demonstrating changes in behaviour – applying the spirit of the law, not just abiding by the letter of it," Edelman says. He adds that two types of spokespeople outside the corporate communications staff are best placed to instil company trust by visibility in the media – the CEO and independent critics. In the case of a family company the CEO could well be the family head, so this could double the credibility.

Engender transparency
For listed companies, the associated pressures absolutely demand tight media management. Scrutiny is at its most frenzied for companies filing their annual results with the regulators – with obligatory press conferences often a potential showdown.

Last year was the year of the shareholder activist: the Disney/Calpers saga, the appointment of Rupert Murdoch' son James to CEO of BSkyB, or any number of investment company/pension fund revolts of late. Powerful shareholders with serious gripes now take their issues to the press in their quest for both transparency and results. That is their right, but it is the incriminated company's obligation to appease through the professional channels. This is where experienced media staff play a pivotal role in both investor education and image control, both of which can knock down company share prices in seconds.

Jeff Berger has been a public affairs manager for US construction giant Bechtel Corporation for 15 years. As part of a 20-strong international commun­ications team at the fourth family generation company, he is well-versed at facing the music. His position could be considered a crisis management role, if the controversial organisation did not shape its media philosophy to manage the endless bad press it receives. Bechtel's press policy is driven by the company's charter – a set of visions, values and 'leadership covenants' drawn up by CEO Riley Bechtel and the board in 2001. This charter updated a similar document issued to the company by his father and predecessor, Steve Jr.

"We believe [the new charter] captures the essence of our heritage and we hope it will further improve the culture of our company if we embrace and work by it," said Riley on publication.

Jeff explains further. "We focus on reputation rather than image, an important distinction in terms of our corporate culture, and this harks back to the Bechtel family's own values as well as the nature of the business we're in."

Manage bad press
Bechtel's level of 'bad' press is every family businesses' worst nightmare, particularly when it questions the ethics of both the company and individual family members. CEO Riley Bechtel received the obligatory media battering when he was appointed to the Bush administration's Export Council, responsible for identifying new markets outside the US for domestic corporations. In addition to continued coverage of Bechtel's government ties and the company's involvement in the rebuilding of Iraq, it was suggested by the press that the company and family was funding Osama Bin Laden's terrorist factions; An investment company Bechtel formed but which went fully independent in 1986 had been conducting business in which Bin Laden's name was raised. Additionally, Bechtel had in the past done business with the construction company owned by the Bin Laden family, which publicly disowned and cut all links with Osama two decades ago.

"Any company has to expect a certain amount of negative press and when we see that we respond," Berger says.

Pre-empting trouble before it arises is the aim of those corporations who know the value of their reputation to the bottom line. Don Schwerzler, founder of the Family Business Institute, believes that something as simple as a formalised documentation of the family business history can be part of that. "Written histories can set the record straight. Left to the rumour mill, stories relating to one's company can become exaggerated, twisted or worse. Sometimes those negative stories can be destructive to both the reputation of the company and its owners," Schwerzler says. 

Back-door press
London's 'corsetier to the Queen' Rigby & Peller has a more fluid but active approach to the media. Second generation co-director Jill Kenton succeeded her mother as the in-house media manager three years ago. Jill moved quickly to create an informative website, ensuring relationships with leading media stylists and editors were forged and maintained. This helped feed the message of the esteemed luxury underwear company through from employees to clients, suppliers and the media.

Rigby & Peller, well-known among young celebrity females for their corsets, are treated in a softer way by the media. Jill's favoured relationship with the media is to let the products speak for themselves through a number of cross-promotional alliances with high-profile partners. They have recently been associated with a promotion for the latest Andrew Lloyd Webber musical Woman In White and are expected to gain heavy media coverage through all major mediums. The company was also involved in the movie Bridget Jones' Diary.

"I generally go with my gut feel in press relations, rather than strategic planning," Jill says. "In my mother's time the brand was in the process of establishing itself and she would have been really happy to appear on the front page of The Sun – but we're a prestige brand now and we have an image to uphold. I receive daily phone-calls from 'lad' magazines but I always reject them, because I have to be far more selective with our product placement than that." 

Bechtel's Berger sums it up. "The reason for a press relationship is not even about bad press but about the press in general. We realise that over the long haul it is much better to engage with the media than not to. We work with journalists the world over, securing them interviews and providing as much information as possible, because we want our story told straight. If we kept silent, a story of some sort is likely to be told in any case. We would much rather be a part of it than not."

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