Sunday, 15 May 2011

Burson Marstellar contributes to corporate governance thinking

There were newspaper reports last week that Burson Marstellar had been retained by Facebook to get negative stories about Google into the press. 
Paul Cordasco, a spokesman for Burson-Marsteller, told the Guardian on Thursday that the assignment was "not at all standard operating procedure" and was against the company's policies. He added: "The assignment on those terms should have been declined."
Which raises a number of interesting governance questions;
  • at what level in the company was this assignment approved?
  • what are the company's policies and how are they communicated to staff? 
  • how does the company control what staff do?
Subsequently they added about the former journalists, who were trying to interest papers in these stories, that
The pair will receive receive extra "training" and Burson-Marsteller said it intends to redistribute its code of ethics to all employees in the wake of the scandal.
Could BM maybe publish this code of ethics as well as explaining what their systems are for controlling what their staff do? Because I find it very odd that a pr company does not have control systems that vet new assignments for issues such as appropriateness, ethics, conflicts of interest etc. If they don't then that is a huge governance issue because corporate governance is not just about boardroom behaviour but also about how the board communicates its values and controls how its people carry out company policy.

In the past BM has been accused of acting burnish the image of some pretty nasty African dictators and stepped back from such activities. In light of that is the company really saying that they don't have a system in place for new assignments to passed through an approval process?

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