According to a recent article in PRWeek, many Wall Street companies have begun investing more in public relations and marketing activities to combat the increased negative attention and public skepticism that they have faced during the past few financially turbulent years. Wall Street giant Goldman Sachs justified this new trend when the company recently listed “adverse publicity” as a business risk on their 2009 10K form -- the first time that a company has ever done so.
This new identification of bad publicity as a business risk to be taken as seriously as market fluctuation, increased competition and terrorist attacks, is an interesting phenomenon as it positions PR practitioners as risk managers. Working with a variety of technology vendors, many of which count risk management as one of their central concerns in various capacities, I had always thought of the term in a different way; I had conceptualized it in a more material sense, as the purpose of the technology that identifies potential fraudulent activity or prevents security breaches.
But, according to the ISO 31000, a guide to the standards of risk management published by the International Organization of Standardization, risk is defined as “the effect of uncertainty on objectives (whether positive or negative).” So, in that sense, the classification seems pretty fitting considering that our main function as PR practitioners is to help drive companies to achieve their business goals by eliminating the threat of insufficient or negative publicity. In public relations, we are risk managers in that we protect the brand, which as the article in PRWeek asserted, is “one of those intangible assets that investors consider right along with the P&L statement.”
This new categorization of adverse publicity as a business risk and the consequential risk management role that it assigns to public relations practitioners helps to exhibit the vital contribution that PR makes to the achievement of business objectives. However, it is important that companies recognize that public relations are essential not just as a way to protect the company but also as a way to promote it. While PR practitioners fit the position of risk managers very well, their real value far exceeds that role.
By Bess Hammitt