Integrated reporting and strategic public relations

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Guest post by Benita Steyn

In November 2011, Benita Steyn and Estelle de Beer from South Africa delivered a paper, The Strategic Role of Public Relations in the Process of Integrated Reporting at the Corporate Governance and Strategic Communication Congress in Milan, Italy.

We welcome back contributor alumna, Benita Steyn, who kindly agreed to provide an abridged version of this paper for PR Conversations.

Backgrounder: Integrated reporting and strategic public relations

The collapse of the financial system and the global economic crisis of 2008-09 has been a wake-up call to the world. The realisation has dawned that a fundamental shift is needed in the way companies and their directors act and organise themselves. Actually, the financial services industry needs a whole new operating model.

Dean Nohria of the Harvard Business School says that it has become necessary to rethink/rebuild business organisations around a new set of principles and behaviour.

The most important principle is that governance, strategy and sustainability are inseparable.

Also important is stakeholder “inclusivity,” i.e., considering the legitimate interests/expectations of stakeholders to be in the best interests of the company (and not merely an instrument to serve the interests of shareholders).

An important step in the fundamental shift needed in corporate governance is the recommendation of the King Report on Governance for South Africa, 2009 (a.k.a. King III), that companies adopt “integrated reporting” (that is, integrate annual financial reports with sustainability reports).

This means economic, social and environmental issues need to be included in corporate strategy, management, reporting and assurance in the same manner as financial matters. The increased transparency of an integrated report will result in greater legitimacy and trust in the company and an enhanced reputation among its stakeholders.

How does this relate to PR?

In its latest theoretical developments and best practice, the field of PR has much to offer in bringing about the organisational changes indicated above, referring, for instance, to the principles contained in:

  • the Grunigs’ two-way symmetrical (dialogic) communication, excellence and strategic management behavioural approaches (in the USA);
  • the relationship and reputation management approaches (originating in the USA);
  • the reflective/societal approach (in Europe); and
  • the Pretoria School’s strategic approach (in South Africa).

According to Toni Muzi Falconi, the first 10 years of the 21st century, “…ignited a new beginning of the public relations profession in its day-to-day practice, conceptualization and public perception.” However, in many instances, top management remains unaware of the strategic contribution that public relations can make towards organisational sustainability, which has become the primary moral and economic imperative of this century.

What is integrated reporting?

The King III Report (2009) defines integrated reporting as a “holistic and integrated representation of the company’s performance in terms of both its finances and its sustainability.” Therefore, it is not simply an amalgamation of the annual financial statements and the sustainability report. While it is the organisation’s primary report, it could be linked to other more detailed reports and/or information on the company’s website.

The overarching objective of an integrated report is to enable stakeholders to assess the ability of an organisation to create and sustain value over the short-, medium- and long-term. Stakeholders should be able to determine whether the organisation’s governing structure has applied its collective mind in identifying the environmental, social, economic and financial issues that impact on the organisation, as well as to assess the extent to which these issues have been incorporated into the organisation’s strategy.

Interactive communication with key stakeholders is fundamental to the success of integrated reporting, as engagement leads to knowledge of the stakeholders’ legitimate interests and expectations. The information acquired through this engagement process enables the executive team to implement—and the governing structure to monitor—the organisation’s long-term strategy on a more informed basis.

What are the benefits of strategic PR role-playing in the process of integrated reporting?

From a PR perspective, it will assist in further institutionalising its strategic role, that is, make it an ongoing, accepted practice in most organisations. Although recent research indicates an increasing incidence of strategic PR role-playing in best practice organisations, in many countries/organisations it still remains PR’s technical role that is best known and widely accepted, and thus demanded by top management and other functions.

According to Toni Muzi Falconi, “The effective governance of stakeholder relationships is the new global frontier of the public relations and communication profession.” But for PR to play such a strategic role, its processes have to be fully integrated with relevant organisational processes (which in many instances are not the case).

Getting involved in integrated reporting thus provides an opportunity to fully integrate strategic PR processes (such as environmental scanning and stakeholder/issue/risk management) with those of the organisation. It will bring to top management’s attention the knowledge base and skills set that practitioners in public relation’s strategic role offer and how this can be harnessed in addressing the new organisational challenge of “integrated reporting.”

The organisational perspective

Strategic PR role-playing in the process of integrated reporting benefits not only the field of PR but also the organisation. A multidisciplinary approach is needed to provide a comprehensive picture of organisational performance.

Many stakeholders are questioning the relevance and reliability of annual financial reports as a basis to make decisions about companies, because the hard quantifiable data desired by financial analysts do not always tell the full story. A deeper understanding of risk, performance and value generation can be obtained by providing the softer, non-quantifiable environment, social and governance information.

Such forward-looking information will enable stakeholders to more effectively assess the total economic value of a company. It is thus necessary to engage the broader stakeholder community and better understand its expectations, values and norms, and what stakeholders consider material in terms of non-financial information.

Environment, social and governance information (ESG)

The environment, social and governance information (ESG) required by stakeholders can be supplied by boundary-spanning functions, such as PR through its strategic activities. For example:

  • advanced media analysis, social and perception audits;
  • the monitoring of trends/issues/activist groups and government decision makers on identified issues;
  • the measurement of stakeholder relationship health and organisational reputation.

Even when ESG information is supplied in sustainability reports, the latter often fail to make the link between sustainability issues and the organisation’s core strategy.

Here existing theories regarding PR’s strategic role in enterprise strategy and PR strategy development can contribute to the process of integrated reporting.

Guidelines for integrated reporting

The first country to mandate integrated reporting is South Africa. The Johannesburg Stock Exchange (JSE) has made it a requirement for listed companies, effective 2010. Because there is no globally recognised framework for measuring/reporting on non-financial ESG performance, the Integrated Reporting Committee (IRC) was formed in South Africa. The IRC presented its integrated reporting framework/guidelines in January 2011, followed by the International Integrated Reporting Committee (IIRC), which subsequently released its discussion paper on September 12, 2011.

Based on an analysis of the IRC guidelines (specifically Section 3 that outlines elements to be addressed in an integrated report), Estelle de Beer and I presented the findings of our exploratory research in Milan; namely, that:

PR can contribute to the process of integrated reporting (and its outcome, the integrated report) through three strategic PR processes:

1.  Environmental assessment.

2.  Contribution to enterprise strategy development (i.e., to the sustainability dimensions of  strategy).

3.  Development of PR strategy (deliberate and emergent).

If interest is demonstrated, Estelle de Beer and I would be happy to provide more information on these three processes.

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Benita Steyn is a part-time lecturer at the Cape Peninsula University of Technology in Cape Town, South Africa, where she teaches on its web-based Master’s in Public Relations Management program. Her research interest is strategic public relations, i.e., the contribution of PR at the top management level.

Benita Steyn recently began a ‘gap’ year in which she plans to travel abroad extensively—for leisure, not for work!

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37 COMMENTS

    • Thank you, Toni. Estelle and I find this a truly exciting topic and a window of opportunity to concretise the strategic role of PR. While in the past strategic PR was, in many instances, a ‘push’ effort towards top management, there is now a ‘pull’ from them (and the board) for any assistance — from whichever direction or function — with the important new challenge of Integrated Reporting that is facing organisations.

      I have already sent you the paper.

      • Benita: Integrated Reporting reminds me of Balanced Scorecard (BSC) created by Art Schneiderman in 1987 and articulated by Kaplan & Norton in the 1990s.

        Among the four pillars of the methodology is the communicating of the organization’s vision and linking it to operational performance. Also central to BSC is the inclusion of financial and non-financial data and finally feedback, learning and adjustment.

        What are the similarities (if any) between Integrated Reporting and BSC? Does your paper touch on BSC at all?

  1. Brilliant – as always.

    May I ask, that within the framework, #2 refers to contributions to both deliberate strategy development AND emergent strategy formulation (similar to itemizing both in #3). This distinction would also apply to #1: there be regular ongoing scanning for deliberate but also special, one-time research for emergent.

    By differentiating deliberate and emergent from #1 to #3, one can see PR playing more than a “tie objectives to corporate objectives” role. Certainly, the strategic planning literature is all about strategy implementation these days, not about strategy setting per se.

    Thank you Benita and Estelle for this. Your scholarship always has led the field!

    By the way, please send me the paper that Toni wanted, that since he already has a copy, you won’t be sending him.

    Best.

    Fraser

  2. No, Don, our paper did not touch on the BSC. Although Estelle and I were tempted to focus on the Integrated Reporting (IR) aspect of our topic (because it was new/interesting), the paper was delivered at the ‘Corporate Governance’ and ‘Strategic Communication’ Conference. We were asked to focus on the latter and therefore explored the relationship between the two concepts. But we plan to work further on the Integrated Reporting and related concepts. I am a ‘babe in the woods’ here, but Estelle was very involved in the King III Report and has been working on governance and sustainability for quite a while.

    IR brings greater clarity about the relationship between financial and nonfinancial key performance indicators, which helps managers understand and confront the trade-offs necessary to balance ‘financial and societal demands’. The Balanced Scorecard (BSC) is one of the frameworks that developed during the last decade on how to use nonfinancial information to supplement financial reporting, as you say. Although it is also relevant for external reporting, it developed largely for ‘internal measurement, management and reporting purposes’.

    Another ostensibly similar framework is the Global Reporting Initiative (GRI). But all these frameworks have a different focus. The GRI focuses on developing a reporting framework for providing stakeholders with relevant info on a company’s economic, environmental and social performance (esp the latter two).

    The biggest similarity between IR and the BSC is arguably that both lead to ‘better management decisions’. Kaplan and Norton said that better measurement, and therefore better information, leads to better decision-making. Higher quality metrics required for external reporting provide higher-quality internal information and this results in higher quality decisions. IR necessitates a great deal of internal collaboration. When different units and functions understand the consequences of their decisions on others, better decisions are made.

    We regard the role of PR in the environmental assessment process as most important for the very reason that this role entails ‘listening’ to the stakeholders and societal/interest groups, interpreting and feeding this strategic intelligence into organisational strategy processes (because better information leads to better decision-making, and thus to better strategies). I will elaborate on PR’s role in all of this when responding to Fraser’s comment (tomorrow!).

    • Thanks for a comprehensive and enlightening answer, Benita. Would appreciate a link to or PDF of the paper — if this is possible.

      • You probably find it strange that there is no link to the paper, but there is a reason. Two academic journals are to publish special issues on (some of) the papers delivered at this conference and a book is also to be published. If we publish our paper on the web, we are automatically deleted from these selection processes. To solve this dilemma, anybody interested in the paper can send an email to b.steyn@lantic.net or estelle.debeer@up.ac.za and we will forward it to you.

        • Thanks. I do understand. Have just accessed the IR webpage and there is plenty on general methodology. Will forward my email. Have a great “gap” year.

          • Fraser, I want to expand a bit on the three processes outlined in our paper (mentioned in the last par of the blogpost). You will then clearly see how we agree with you on the importance and need to differentiate between deliberate and emergent strategy at all levels/in all three the processes mentioned.

            But before doing that, it is necessary to clarify the main concepts since most PRC readers are not familiar with the paper. (In order for everybody to participate in this conversation, we need to be on the same page).

            I think that we would all agree that the overall strategic management of organisations is inseparable from the strategic management of stakeholders (key people), issues (major topics, situations, developments, forces, pressures), risks (anticipated dangers/hazards), and disasters/crises (risks that actually materialise/take place).

            1. In its practical implementation, the core of PR’s strategic role rests on three pillars:
            • environmental scanning and monitoring, to
            • identify/engage/manage organisational stakeholders, as well as
            • societal issues/reputation risks/disasters/crises (and the interest/activist groups that emerge around them).

            2. ‘Enterprise’ strategy:
            • refers to the broadest, overarching level of strategy — addressing the organisation’s relationship with society, its political and social legitimacy;
            • can be seen as a societal role or bridging strategy, concerned with achieving the organisation’s non-financial goals;
            • acts as a framework or envelope within which the corporate strategy and other, more specific types of strategies will operate.

            At the enterprise/institutional level (inter alia):
            • the organisation’s values are to be determined;
            • its reputation addressed;
            • sound corporate governance principles adopted; and
            • societal responsibilities outlined.

            Relating the 32-yr old concept of ‘enterprise strategy’ to the current conversation/focus on sustainability, I would regard enterprise strategy as referring to the ‘sustainability dimensions’ of strategy.

            3a. The‘deliberate’ strategy component of PR strategy refers to using communication as a strategic opportunity to achieve organisational goals such as:
            • engaging with, and building relationships with strategic stakeholders;
            • portraying the organisation as a good corporate citizen that behaves responsibly and sustainably; and
            • maintaining a good reputation.

            In the ‘deliberate’ PR strategy process, the organisation’s key strategic priorities are reviewed, and ‘strategic organisational positions and goals’ are selected to be communicated to internal and external stakeholders (e.g. a new organisational focus on the Triple Bottom Line, stakeholder inclusiveness, sustainability or societal responsibility).

            3b. The ‘emergent’ strategy component of PR strategy refers to using communication to:
            • solve organisational or communication problems in unstructured situations, or
            • to capitalise on opportunities presented.

            Emergent PR strategy thus outlines the communication needed to address constantly emerging ‘societal and stakeholder issues/risks, and crisis situations’. Stakeholder and issues management form a core focus of emerging PR strategy. (The latter originates not in the mind of the PR strategist but as a result of the interaction of the organisation with its environment).

            This then explains the core of the three processes that represents PR’s strategic contribution to the integrated reporting processes and their outcome, the integrated report (according to the findings of our paper).

  3. Benita, thank you for the detail. I agree fully with your approach.

    From my experience as a management consultant to PR/C functions, the ability of a Chief Communication Officer (CCO) to enact 3b is key to the PR/C function being – and being seen to be – “strategic.” This separates the truly great from the OK CCO.

    Excelling at 3b requires the following:

    1. that the PR/C function recognize that the “interaction of the organisation with its environment” and its relationships with stakeholders are best conducted person to person. That is, the relationship is not our organization to the stakeholder organization and definitely not PR/C function to stakeholder organization. It’s the lead manager to the supply chain, to the customer base, to the community around the plant.

    2. that the PR/C function recognize and help “solve the organisational or communication problems in unstructured situations” within the lead manager’s unit that are hurting the establishment of a solid stakeholder relationship. That is, it is ‘our’ issues that are creating or acerbating the stakeholder issue. Ultimately, it is our actions or behaviours that must change in 99% of the cases.

    3. that the PR/C function recognize that its internal client advisors or account executives must play a challenge role to the lead manager of the unit in question. That is, their role is to not just provide communication solutions but their role is also to identify (internal environmental scanning and monitoring – not just external to the organization) and help address organizational and internal to the unit communication issues that are prohibiting a solid stakeholder relationship from forming.

    I always learn more when you post, Benita!

    Fraser

    • Fraser, you raise some very interesting points.

      #1: I agree with your views on ‘relationships’ with stakeholders. It is not the PR function that has the relationship (but they can facilitate the relationship, and MUST identify problems in the relationship, as you rightly said in #2). That is why ‘relationships’ is not my paradigm for PR. I see strategic PR as resting comfortably within a societal/reflective approach, performing a ‘mirror’ function or ‘reflective’ task.
      Can you however clarify “interaction” with the environment. What exactly do you mean? I see strategic PR to be founded on a ‘listening’ role on behalf of organisational units, managers, individuals, the Board – wherever there is a problem/issue or opportunity, whether strategy/policy or behaviour, whether external or internal. This listening role is not necessarily person to person. Environmental scanning (strategic research) is often not person to person.

      #2. I also believe that it often is the actions or behaviours of organisational members that must change. But it could also be the policies/strategies, and that is often the domain of top managers (do you see them as ‘lead’ managers?).

      #3. I strongly agree with you re the internal role of PR. What you are describing is a combination of an (internal) reflective strategist role and PR’s educational role (the latter identified by the EBOK project in 2001).

  4. Benita, the phrase “interaction of the organization with the environment” was one you used and I quoted.

    Regarding environmental scanning, some of the best ‘intelligence’ comes from PR account executives debriefing the lead manager in a relationship and thus accessing the learning that comes from that stakeholder relationship – and then analysing this intelligence against what was learned from debriefing other managers, from external scans, etc.

    When I said actions/behaviours, I too included policies, strategies, governance, etc.
    Lead managers may be top managers, but they might be middle managers as well – a plant manager for example.

    I’m unfamiliar with the EBOK project, but I did present my own layman’s version of an internal reflective strategist role at the Trieste World PR Festival that Toni ran. That role is based on having an internal account manager structure in place.

    Other than the terminology, I believe we agree on most everything.

    Great post, Benita.

    Best.

    Fraser

  5. Yes, I know you quoted my “interaction of the organization with the environment” and I know what I mean with it, but I was wondering how YOU interpreted “interaction” – since it could refer to ‘communication with’, or to ‘relationship with’ or to ‘reflection on the information gathered from the external environment, and interpreting it for the organisation.’ All three interpretations refer to different worldviews/paradigms/approaches to PR (I meant the latter).

    The findings of the landmark European Body of Knowledge (EBOK) project indicated four PR dimensions or roles, of which the reflective role was considered the most important (Van Ruler, Vercic, Flodin & Bütschi, 2001):

    • Reflective: To analyse changing societal standards, values and viewpoints, and discuss these with organisational members in order to adjust organisational values and norms regarding social responsibility and legitimacy. This role is aimed at developing the mission and organisational strategies, and is directed at the organisation’s dominant coalition.
    • Managerial: To develop strategies/plans to maintain relationships and manage communication processes with publics in order to gain public trust and/or mutual understanding. This role is concerned with the execution of the organisational mission and strategies, and is aimed at commercial or other (internal and external) public groups.
    • Operational: To prepare a means of communication for the organisation (and its members) in order to help the organisation formulate its communication. This role is concerned with communication plans developed by others and has to do with implementation. It is not supported as a view on public relations, but mentioned as a common role.
    • Educational: To help the members of the organisation become communicatively competent in order to respond to societal demands. This function has to do with the mentality and behaviour of organisational members and is aimed at internal groups.

    Up to this time, roles research was confined to the PR manager and PR technician. I remember that when I heard these findings in Bled, Slovenia in 2002, I got palpitations. I realised then that my views on the fundamental purpose of PR were very similar to the European societal approach (and not to the US roles or the relationship paradigm). It was at this moment that my paradigm shifted from ‘relationship management’ to the ‘societal/reflective’ approach to PR.

    If you look at the reflective role, you will realise how relevant it is to current strategic conversations and to the concept of integrated reporting!

  6. I feel that I’ve been put in my place – as a North American old guard, and slacker at that. Rightfully so!!

    Regarding how interaction is defined, actually I see all three approaches intertwined. I have never broken them out so definitively like you have and thinking about it, I don’t think that – in practice – a CCO could separate them so distinctly.

    Of the EBOK four, I would agree that the reflective role is the most important, But, again, from a CCO perspective how do you – in the same meeting, within the same point you are making – NOT “analyse changing societal standards, values and viewpoints” (Reflective role), present scenarios about changing relationships with publics (Managerial), present possible positioning and talking points to the CEO (Operational) and then propose spokesperson training and the reasons why it would be needed (Educational).

    The senior team wants solutions, if not just direction. My example above may not be perfect, but my point is that these roles are not mutually exclusive in day to day practice.

    I agree that the technician-manager paradigm has been the main focus of study in NA. Yet, the four roles in the EBOK seem very similar to an expanded manager role described in the last Excellence book. He is something I wrote in 2004 in a paper on roles, in the IPRRC proceedings.

    “For example, L.A Grunig, J.E. Grunig and D.M. Dozier (2002, p. 228) argue that the manager role has “two empirical and conceptually distinct aspects of managerial expertise.” There is an administrative manager aspect, and a strategic manager aspect. The administrative manager “involves the day-to-day operations of a well-run department” (L.A Grunig, J.E. Grunig and D.M. Dozier, 2002) and includes activities such as developing goals and objectives for the department, preparing the department budget, developing strategies to solve PR problems, managing the organizational response to issues, and managing people. The strategic manager conducts research, uses research to segment publics, performs environmental scanning – and therefore is associated with the organization’s strategic management processes by among other activities: solving public relations problems; managing the organization’s response to issues; developing PR programs; and informing and counseling management. ”

    The strategic manager seems to play all four roles. I called in the Executive Leadership role. Seems to me that whether called reflective, strategic manager or executive leadership it is the highest role – because the CCO enacts the role not as head of the PR/C function and concerned only with the function’s contribution and value, but as a separate and equal member of the management team concerned with the organization as a whole.

    I think we are in agreement, we just use different terminology. Or, am I so 1990s North American!

    Fraser

  7. I know you are making fun of me, Fraser! But I will take the bait and make it clear that the foundations of my research are sooo 1990s North American. (Believe it or not, I got the same palpitations when I was exposed to the Excellence books for the first time)! And right now I much appreciate the opportunity to hear the views of a very well known, very experienced (North American) practitioner who has an interest in theory to boot! Be assured that what I learn from you goes straight into my master’s classroom.

    With regards to the different approaches we talked about, I am not a purist but work interdisciplinary myself and take what I need from different approaches. But there is usually a dominant approach that directs your actions. Just like there is a dominant (PR) role that you play.

    I agree with what the CCO does/says in the meeting but that doesn’t necessarily mean this person actually plays all those roles on a regular basis. For instance, if he/she were predominantly in the PR ‘educationist’ role, this person wouldn’t be in a meeting with the CEO (on a regular basis) to start with. He/she is in the meeting because of predominantly playing the CCO role (the PR strategist/reflective/PR executive role).

    I see the CEO as being in the same situation that you described for the CCO. The CEO has to be knowledgeable on the CFO/CMO/COO role etc and speak on their behalf sometimes, but plays the CEO role predominantly.

    It might only be educators who think in this way, Fraser. Theories are very important conceptual aids in teaching. Also, when you have only a few periods or a few months to teach something, you have to dissect and select the most important knowledge or skills. So forgive me for being sooo pedantic!

    With regards to the ‘administrative’ and ‘strategic’ manager role identified by Grunig, Grunig & Dozier (2002), one of my master’s students (Terry Everett) identified similar roles which she labelled the ‘Strategic public relations manager role’ and the ‘Operational public relations manager role’. I will send you the article we published on her research.

    I think I latched on to the European societal approach because its ‘reflective role/dimension’ provided me with a conceptual framework within which to understand/anchor all the loose buzzwords that were flying around at the end of the previous century, such as social responsibility, legitimacy, trust, reputation etc.

    For those not familiar with it, if you have a societal or reflective approach to PR, you view the organisation from an outside-in perspective; show a special concern for broader societal issues; assist an organisation to adjust its policies, strategies, behaviour and functions to public demands on the basis of an assessment of its reputation; assist in preserving the organisation’s ‘license to operate’; obtain legitimacy in the eyes of the organisation’s stakeholders and society; and earn public trust.

    Thinking of the latest buzzwords (namely ‘sustainability’ and ‘governance’), they too comfortably fit into a societal/reflective approach. I think you can guess by now which theoretical approach we used to anchor ‘integrated reporting’. (I am sorry for being sooo predictable).

  8. I have resisted a few days from intervening in this great duetto. You have certainly dwelled on the strategic issue of the integrated reporting process.

    Allow me to add one more ‘operational’ perspective to the potential of that process for our profession, if only we were able to capture now how we should advocate whithin organizations and their leaderships the real impact that a continued, multi-channel and ongoin reporting process could/would have on the structural framework of the ‘new organization’.

    A few points:

    1. -today organizations (yes, of course and first of all public sector as well a social organizations) have different and more than often unrelated narrative (Judy?) needs either by law, by specific industries norms, or by voluntary decisions.

    Financial, safety, environmental, social, marketing and classic public relations as well as other narratives.

    -if you analyse the overall narrative performance of companies it is easy to realise that many companies today have become medium sized pulishers with significant and growing investments.

    -for the sake of understanding, lets put all this together and call it the soft part of the company

    -the profile of any organization should, according to common sense, be as coherent and aligned as possible in a world that for different reasons has, with many other of our consolidated XXth century paradigms, shattered the ‘one company one voice’ mantra and given ground to a ‘many voices, but as coherent as possible’ one.

    -the more traditional ‘hard’ profile has to do with the other part of the equation: raw materials, transformation, innovation, packaging, distribution etc.. along the old value chian process.

    -the narrative effort of the organization is today probably at least, if not more, important to the new concept of value network creation (as an evolution of the value chain) embedded in the global alliance’s stockholm accords brief of 2010.

    -the fact that much more than 50% of the capitalization of most companies relies on soft issues

    -the fact that stakeholders are more and more demanding of attention to issues like governance, sustainability, listening before deciding, engagement etc…
    But there are many more clues that point in that direction.

    2. Ok now. An ongoing reporting process of the nature and with the characteristics I have indicated implies a structural, continued horizontal and vertical interaction between persons who inside and outside the organization produce and develop those data, ensuring that all are underastandable, integratable and tagged according to the different interests of staeholder groups related to the various areas of the narration.

    So the ‘organizational chart’ (if this still makes sense) looks more like a ‘fuzzy’ relationship systems that relate to both ‘profiles’ under one leadership (the board, the ceo, the management board, according to each organization’s disctinct and unique culture).

    3. If you read here Benita’s excellent descriptions of the reflective and the educational profiles of strategic public relations and adapt these to the ‘new communicative organization’ (yet another stockhom accords concept) you will easily understand how these two profiles perfectly and directly fit into the soft profile (vertically of course, but more importantly educationally).

    Does this make sense to you?

    toni

    P.S.: OPR occupy public relations….continuons le debat.

    By the way, I am terrified by PRSA’s crowdsourcing initiative for a redefinition of PR and alarmed that so many other organizations, including the GA and the CIPR, have agreed to at least formally step behind this process.

    What would an organization’s leadership not do for a New York Times article….?

    As all other professional definitions are blurring we once more exhibit our inferiority complex and compulsive need for clarity in a society that is everything but clear and changes every day:

    A highly conservative if not reactionary approach and through this infantile exercise.

    I thought this had already been egregiously done by the Canadian trio three years ago and should PRSA have not taken off from that healthy exercise?

    One thing is collaborative decision making another thing is populistic branding….

  9. Benita, you’ve said it all. And I agree.

    Interestingly, I recently came across some old reports from a major project I was involved with in the mid 1990s. The project was to identify required competencies for CCOs. The project was based on the identification and use of select “expert performer” CCOs. Once selected, through detailed interview, the roles currently being played by these expert performers were identified – and then the competencies needed to enact the roles were teased out.

    I just smiled when I read through the list of roles enacted by CCO expert performers, given our discussion above. The roles, with some of the competencies in brackets:

    Animator/Team Developer
    (builds teams; ensures info sharing amongst everyone; etc.)

    Change Agent
    aware of big picture; anticipates environmental changes; instigates organizational change to respond; etc.)

    Educator/Coach
    encourages people to acquire new skills and grow; facilitates changes in behaviour; etc.)

    Joint Venturist
    develops working partnerships with other groups; believes people interact with people – organizations do not interact with organizations; etc.)

    Social Marketer
    aware of global community; develops trust in the community; adjust programs and services based on societal issues and community needs: etc.)

    Spokesperson
    believes everyone has a right to all relevant information; not reluctant to say we made a mistake; etc.)

    Strategist
    sees the interconnectiveness of all things; applies foresight to anticipate change; provides insights and leadership to move people to where they need to be; etc.)

    These are not in any specific order.

    Interesting?

    Fraser

  10. We live in the age of the Technocrat: listening to the few, not the many. Benita, your paper was given (ironically) in Italy whose government is composed of unelected officials who make a virtue of being anything but politicians; the same trend is rife throughout Europe. This new elite has no relationship with most of their stakeholders. They blame the problems that their predecessors – democratically elected politicians – encountered on their timid attempts to please too many constituencies. As some of you may know, I’m an old-fashioned elitist by inclination, not somebody who is in awe of the crowd. But even I accept that this new development is not exactly a healthy trend. Yet we need to face facts. In today’s tough environment of austerity and recession, the boom-time version of stakeholder doctrine that was manufactured in the 1960s is withering from the top down in institutions, corporations and governments. Technocratic leadership is back in fashion and it is often going to be brutal in character and deeply unpopular (hence the need for some distance from the mass). So, the world is going in the opposite direction to this discussion. In reality, PRs are going to have to help leaders lead in the new real world; one in which globalisation is going East-West not West-East.

    BTW: Toni is amusing and spot on about the absurdity of PRSA’s pompous attempt to crowd-source a definition of PR.

    • Paul: Unbiased reflection will reveal that it was precisely the absence IR systems for “early warning and boundary scanning” that lead to the chaos you describe. To then hail the advent of the “technocrati” as what should have been the solution in the first place is, to put it mildly, inverted logic.

      How would you explain the recurrent chaos in the financial markets if as you purport the “elite” who don’t listen to the crowd are the answer to the current global problems? In any case the very definition of stakeholder (yes there are many types), partially precludes the “crowd” label. The stakeholder presumably knows his “stake” and is willing to withdraw his cooperation if this stake is threatened.

  11. Thank you so much for all the valuable contributions. As Judy says, your comments are so ‘meaty’ – and therefore it is difficult to decide what to respond to (or rather, what not to respond to). The definition issue that Toni raised is a thorny one and relates to my and Fraser’s discussion on the different approaches/worldviews for PR.

    It is my contention that there will never be only one definition for PR since there will never be only one worldview for/approach to PR. Our discipline resides not in the natural sciences but in the social sciences where different paradigms/worldviews reign side by side.

    To me a definition of PR simply summarises one’s belief of what PR brings to the organisation. So if change is needed, we should rather spend our time looking at where the organisation and society is heading and how PR can contribute to the interaction between the two. Once this most strategic of questions has been answered (even to some extent), the easy part is to derive a definition of what PR is/should be (and therefore should bring to the integrated reporting process).

    Since I have a societal approach to PR, I believe that PR’s purpose (inter alia) is to assist the organisation in preserving its ‘license to operate’ and to obtain legitimacy in the eyes of its stakeholders and society (this could in fact already be a definition in the making)! Therefore, one of my favourite (older) definitions is: “Public relations is concerned with assisting organisations to both formulate and achieve socially acceptable goals, thus achieving a balance between commercial imperatives and socially responsible behaviour” (Kitchen 1997:8).

    Is this not the bigger picture everybody seems to be looking for? (Is this not a contribution we should make to integrated reporting)? Of course there are many means to an end — we could achieve this purpose by building ‘relationships’, by managing ‘reputation’, by ‘persuading’ our top managements to adjust strategies and behaviour to societal concerns (unto each his own). But it is not until the PR profession finds the one overarching paradigm, a unifying purpose, the umbrella under which all of these different approaches can fit, that it will finally have peace and feel that it is indeed ‘marching to the same drum’ (even though each is playing his/her own instrument).

    • Excellent summation, Benita. The PR fraternity (sic) may be barking up the wrong tree — seeking a very limiting “definition” of PR, that attempts the impossible — to be all things to all people.

      The answer lies, as you suggest in you final sentence above “… the PR profession finds the one overarching paradigm, a unifying purpose, the umbrella under which all of these different approaches can fit…” The task at hand should be to seek, articulate and theoretically codify that elusive paradigm. I believe the goal is attainable.

      • We all know that the PR profession must find (or find out about) a unifying purpose (it might already be there). Referring to the PRSA crowdsourcing initiative, the question that is relevant is who should be looking for it. In my opinion, theory should lead practice. If this is not the case, then there is something wrong (with those who develop theory?).

          • Dear Benita, Estelle, Toni, Fraser, Don, Paul and others.

            Beyond a mere academic discipline and profession…

            Let me first begin by explaining my “absence” from the blogging and posting scene of late. I have had – to say the least – a horrible year.

            But, my congratulations with this endeavour. It is not a social nicety or luxury to debate our practice and academic discipline, but a necessity. So, my best wishes go to these conversations. Hopefully these virtual interactions will trigger all the possible thoughts in our minds that might have been latent for many reasons.

            All of a sudden eyes and ears are opening in many parts of the world when we start talking about the power of public relations and communication management. A power that we hold in our heads and hands that have been ignored for quite a while. But I sense a revival as I sit listening to the voices in my head – and there are many. But these voices are not cacophonous any longer – more like orchestral instruments tuning in and finding harmony before the opera begins and the fat lady sings.

            There are numerous novel terminologies entering our debate: sustainability; corporate governance; integrated reporting; whispers about the contribution of strategic communication to ROI (particularly with the wordwide financial crisis and austerity measures looming like a Stephen King horror novel); the influence of social media and networking; messaging; virtual organisations; stakeholder engagement; the onset (again) of “spin”; greed and the ethics of corporate communication; reputation management; communication intelligence and so on…..

            Therefore, I hope that we might see a resurgence – or at least a new awakening – of the discipline and practice.

            A week ago I had to – as the current President of PRISA – comment on the Secrecy Bill that the leading party with a majority in the South African Parliament wants to implement. Implementation of this Bill will seriously harm (indeed halt) the freedom of information in the country. It will not merely be an attack on what journalists and the media in general wil be able to divulge, but all institutions and professions dealing with “information” and communication will be silenced. Of course there are numerous organisations and activist groups trying to prevent the Bill, but as far as my knowledge goes (and I might be ill-informed), PRISA is the only association of its kind – along with media and journalist associations (like SANEF) – that commented openly about the Bill. These open comments did not come without hazard, but our professional associations are not social clubs as far as I am concerned. Our PR associations need “teeth” and public relations and communication professionals must take a stand in the sociopolitical environment. PRISA has succeeded to set up a communication lobby group that now has direct access to the Communications Portfolio Committee in Parliament to take up issues like the Secrecy Bill before they get out of hand.

            On Monday and Tuesday Prof Mervyn King and I had to address delegates at a conference on the practical implementation of the principles of corporate governance in their organisations. The delegates were mainly politicians, ministers of finance, international affairs, board members of NGOs – but in general representatives of governments across Africa. They have bought into the importance of corporate governance and integrated reporting and are finally realising that the nervous system in the body of corporate governance, is strategic communication management. They now realise “what” strategic communication can do. Their new problem, though, is “how” to utilise it at best.

            We need to do research and training, pay more attention to theory-building and see to it that academics and professional associations are working in alignment in future. Notwithstanding the influence – positive and negative – that the explosion in social media and social networks might have on the future of public relations, social media will continuously develop and change. But people need people and people being social will never change.

            Toni, you know I am in agreement with you when it comes to the debate that there is a difference between public relations and communication management. I do not believe we need to rename “public relations”, but maybe we need to redefine the concepts and to “frame” – for the boards of organisations – the importance of what the profession and professionals can do in and for organisations and governments in general. But to be able to succeed in so doing, most of us must be on the same page so that we share our “ways of seeing”. And it will be more about reputation management in future. I leave you with Shakespeare’s quote on the importance of reputation:

            “He who steals my purse steals trash, but he that filches from me my
            good name, robs me of that which not only not enriches him, and
            makes me poor indeed”

            Regards

            Ronel Rensburg

          • Ronel, It is commendable that PRISA commented openly about the Secrecy Bill. It is indeed ironic that while listed companies in South Africa are ‘opening up’ and becoming more transparent by implementing Integrated Reporting (and thereby openly displaying their warts), the Government is ‘closing down’ South Africa, as a commentator recently said.

            Any thinking person of course knows that this is really the ‘Protection of Corruption’ Bill. Silencing the media and any other whistleblowers is the beginning of the end of democracy in South Africa. I felt so strongly about this Bill that I put activist theory to practice (in my ripe old age)–I donned my marching boots and marched to Parliament with a huge banner (twice). This Bill alone has made 2011 an ‘annus horribilis’ for SA.

  12. I share Benita’s sentiment and wish to thank everyone who has contributed to this post. It has made for interesting reading and to my mind contributes substantially to the body of knowledge of communication management.

    Some of the highlights (for me, apart from Benita’s excellent detailed contribution) include Don’s reference to the balanced scorecard; Fraser’s contribution about the executive leadership role and Toni’s reference to the new communicative organisation.

    The integrated report, as the visual manifestation of the strategic business and communication activities of the organisation, has recently become one of the most important outputs of the corporate communication function. Ironically, this is just the latest in a line of many traditional communication outputs, that is being recognised as an imperative for company performance and that is encroached upon by other disciplines.

    In the integrated reporting debate a distinction is currently being made between the reporting process and the report itself. In the discussion paper called the Framework for integrated reporting and the integrated report, released by the Integrated Reporting Committee of South Africa a few months ago, it was stated that: “Interactive communication with key stakeholders is fundamental to the success of integrated reporting as engagement leads to knowledge of the stakeholder’s legitimate interests and expectations”. Prof Mervyn King goes on to state in the Foreword: “It is my belief that integrated reporting represents a significant and much needed evolution of reporting practice and will start influencing behaviour”.

    Virtually everything that has been alluded to in this post are addressed in the abovementioned document, which illustrates how closely aligned communication processes have become to management processes. What makes this document and its content specifically interesting, is the fact that it was released by SAICA (South African Institute for Chartered Accountants), which shows that the accountants are also now working in the stakeholder paradigm.

    Allow me to include two more relevant paragraphs from the report:
    “Organisations should have interactive communication processes in place so that the legitimate interests and expectations of their key stakeholders can be considered and addressed. The acquired information from this engagement process enables the executive team to implement, and the governing structure to monitor, the organisation’s long-term strategy on a more informed basis.

    The integrated report is only one part of the organisation’s broader and ongoing communication with stakeholders and should provide an integrated view of the organisation’s strategy and total performance.”

    (Please see SAICA’s sustainability website at http://www.sustainabilitysa.org for more information on this topic.)

    This brings me back to the topics of the new communicative organisation, the executive leadership role and the balanced scorecard. I strongly support the communicative approach that Toni has put forward, because communication is a tried, tested and all-encompassing concept to explain what it is that we are doing. It is only the context in which it manifests, that varies. Fraser’s view of the executive leadership role supports an integrative and holistic approach to roles, which I also support from a pragmatic perspective. I am of the opinion that we must distinguish between roles that individuals play and the responsibilities they have in a specific position. Individuals can play more than one role simultaneously, depending on the position that the person occupies in the organisation. Higher up in the organisational hierarchy an individual will perhaps play a 80% strategic role and a 20% technical role, while lower down, it will be the reverse.

    Don immediately made the connection that many practitioners in South Africa are currently making between the balanced scorecard and integrated reporting. Organisations in government, business and civil society are using the balanced scorecard and are aligning those performance measurement processes with integrated reporting processes. The abovementioned Framework for integrated reporting and the integrated report also takes into account balanced scorecard principles. (Craig Fleisher and Darren Mahaffy wrote an excellent article, A Balanced Scorecard Approach to Public Relations Management Assessment, for the Public Relations Review in 1997, that explains the balanced scorecard approach in detail.)

    The fact that integrated reporting has been placed on the agenda of many different disciplines provides an opportunity for communication management professionals to show what value they can add to the discussion. Savvy communication professionals, who have probably already been working in this field for many years, will use this opportunity to show their worth on a strategic level and to gain access to the boardroom. Communication has a lot to offer in terms of integration on many levels.

  13. In my opinion, the Balanced Scorecard (BSC) concept (which Don and Estelle also referred to), really deserves to be brought into the debate on Integrated Reporting. I would argue that the BSC methodology would lend itself to operationalize Integrated Reporting, as postulated by the King Report III (2009).

    I am intrigued by the scope and topics King III demands companies to report on. It is truly farsighted when King III demands that companies in their reporting must go beyond “an amalgamation of the company’s performance in terms of both its finances and its sustainability”. Postulating integrated reporting on governance, sustainability and strategy also clearly goes beyond a rendition of a company’s CSR achievements.

    In which ways now can the BSC methodology contribute to Integrated Reporting along the lines of King III? To my mind, BSC thinking would lend itself to taking the IRC of South Africa’s “Framework for Integrated Reporting and the Integrated Report” to the next level in terms of defining a “scorecard” for the variables “governance”, “sustainability” and “strategy”. The BSC concept then would ask which metrics are to be embedded in each scorecard and in which ways metrics (key performance indicators) can be assigned to each variable. By determining metrics (key performance indicators) and corresponding research methods, and by producing research results (scorecard values), the process of Integrated Reporting could be supported and facilitated. In addition, BSC methodology would foster true benchmarking.

    The foregoing comments constitutes a high-level approach of how BSC thinking could contribute to effectively manage the process of Integrated Reporting. Further effort in designing and conceptualizing instruments for crafting meaningful Integrated Reports (with or without the help of BSC thinking) is needed.

  14. I’ve followed this discussion without posting because I wanted to see the reaction to Benita’s fine summation of the state of play.
    I believe that if you were to describe IR to the world’s most famous investor–Warren Buffett–and ask him what he thinks of it, you might get a very emphatic dismissal of the idea. After all, this is someone who reads annual reports the day they arrive in the mail, and likes the ones without pictures best. Most recently, he made a major investment in IBM that way.

    As an allocator of capital, Buffett (and the many who follow him) simply doesn’t care about anything much beyond the financials.

    BTW. one of the goals of reporting should be transparency. In the USA, the Securities and Exhange Commission launched a “Plain English” initiative some years ago to encourage less opaque language in financial reports, prospectuses, and the like. Apparently, the initiatve isn’t succeeding. I received a prospectus the other day that was 48 pages. Here is a sample paragraph that caught my eye: “Any of the following will be a market disruption event with respect to any underlying futures contract:
    [bullet] a material limitation, suspension or disruption in the trading of the underlying futures contract which [sic] results in a failure by the trading facility on which the relevant contract is traded to report a daily contract reference price (the price of the relevant contract that is used as a reference or benchmark by market participants)”

    There are three additional bulleted paragraphs like this, but I will spare you the pain.

    Maybe PR can help here? Perhaps there should be a new class of technical writers whose main business is financial documents. Certainly the lawyers can’t do it.

    • Bill, I would like to make a proposal to you where both of us (perhaps) could make a little bit of money. Why don’t you forward an investment idea to Mr. Warren Buffet. Since I live in Switzerland, I know that the Swiss Nuclear power plants posted a very nice profit last year. Obviously, they published these hard financial figures in their 2010 annual report (it escapes my knowledge whether they released the annual report with or without pictures). It could be that Mr. Warren Buffet doesn’t know about that, but you could relay that information to him. If he decides to invest, then we could ask for a modest commission and split it between the two of us. What you wouldn’t have to mention to him is the fact that the stakeholder group “Swiss Members of Parliament”, in the aftermath of the Fukushima incident, decided to completely get out of energy production by nuclear power plants (no new nuclear power plants – phase out the existing ones). By the way, the stakeholder group “members of the German Bundestag” took the very same decision, only with a slightly different timeline. These decisions were taken because a majority of the stakeholder groups “Swiss voting citizens” and “German voting citizens” say it’s time to say good-bye to energy production by nuclear power plants. They say so because they feel that this business is not sustainable and, for safety reasons, not in the interest of the people in Switzerland and Germany. Bottom-line: not such a good investment idea to invest in Swiss power plants anymore. Instead, one should now probably invest in the production of renewable energy.

      The debate that Benita and Estelle initiated about Integrated Reporting, in my opinion, is not about the “how” an annual report is written (with or without pictures, in fancy or plain language), but about the “what” a company in the annual report should report on. Integrated reporting according to King III serves as an instrument to enter into dialogue with all relevant stakeholder groups of a company. Corporate strategy, policy and decision making is no longer about taking care of the shareholder value alone, but to balance the interests of all stakeholder groups. Top management’s responsibility nowadays is to have a unit monitor stakeholder group interests, and to take the monitoring results into account when the future course of company is determined and strategies are being developed. These strategies need to secure a sustainable future of the company and the business. It is therefore only natural and pure business logic if the authors of the King Report III demand companies to be mindful of (1) good governance, (2) sustainability, and (3) sound strategy development …. and to continually and repeatedly report on all these issues. Warren Buffet wouldn’t be Warren Buffet if he and his team of financial analysts would only look at financial numbers when they take the decision to invest in a company or business. I contend that they also look at other issues, namely at how sustainable a company to invest in is, and if there are any stakeholder groups (activists, pressure groups etc.) on the radar that could harm prosperous long-term business development and expected profit.

  15. Dear Gerhard,

    I also live in Switzerland. Nukes were chopped here for opportunistic reasons to do with short-term electoral considerations on the part of declining political parties. The truth is that Fukushima killed nobody and will have no lasting environmental consequences off-site. What happened in Japan had no bearing on Swiss nuclear realities at the operational level. Your point rather suggests that emotions and panic and irrationalism and pandering to ill-informed opinion does and should govern what goes on in society. As for Mr. Buffett, I think he’s bright enough to spot that nukes right now in Switzerland are not a good investment.

    The bottom line is: the people backing the points in this blog post don’t seem to read the newspapers or see which way the wind is blowing…. As the BBC puts it today:

    … Europe “cannot continue as they are” and that the Franco-German wish was for “a forced march toward re-establishing confidence in the eurozone”:

    http://www.bbc.co.uk/news/world-europe-16037425

    Get real.

    • Integrated reporting is happening whether we want it to or not, because businesses influence the societies in which they operate, whether they want to or not. Listed companies on the Johannesburg Stock Exchange (as is the case with many stock exchanges across the world) are now obliged to produce an integrated report in terms of the JSE’s listing requirements.

      (See the websites of the International Integrated Reporting Committee (www.theiirc.org), in which HRH the Prince of Wales, Prince Charles, plays an influential role; the Global Reporting Initiative (www.globalreporting.org), in which Prof Mervyn King (King III) plays an influential role; the UN’s Global Compact (www.unglobalcompact.org); AccountAbility (www.accountability.org); SustainAbility (www.sustainability.com); and Tomorrow’s Company (www.tomorrowscompany.com) to name but a few, for more information about the topic of integrated reporting.)

      The most widely used international voluntary reporting code used by the biggest global companies is currently the Global Reporting Initiative’s (GRI) guidelines. According to the South African Institute of Chartered Accountants (SAICA), a KPMG international survey published in 2008 shows that 77% of reporting companies use the GRI guidelines. The survey analysed trends in corporate responsibility reporting of the world’s largest corporations, including the top 250 companies of the Fortune 500 (the global top 250 (G-250)), as well as the top 100 companies in 16 countries. Over 80% of the
      G-250 produce sustainability reports. On average, 45% of the top 100 companies in each of the surveyed countries produce sustainability reports – with Japan and the UK leading the table at 93% and 91% respectively. In some countries there are also legal requirements for the disclosure of sustainability information, while some industries like forestry and chemical have developed industry codes.

      Environmental and social issues have already had an impact on the business models of companies, and hence the communication profession (Stockholm Accords, http://www.stockholmaccords.org). The very way businesses operate – their strategic (triple context), operational (sustainable development) and financial (triple bottom-line) practices – will have to adapt to changes in the external environment, of which climate change is but one example. And if companies do not change voluntarily, they will be forced by empowered stakeholders to do so. (Unfortunately governments are also realising the power of the ‘stakeholder voice’ and is starting to muzzle that voice (the recently approved South African Protection of State Information Bill (POSIB), popularly known as the Secrecy Bill, being a case in point. See http://www.prisa.co.za for PRISA’s comment on the Bill).

      Boards, CEOs and decision-makers (at least of top companies, governments and civil society organisations) lie awake at night about sustainability issues – one just needs to look at the agenda of the World Economic Forum for proof of this. Business people acknowledge that what we are experiencing is not ‘business as usual’. If the prosperity in a society declines, business prosperity declines (Europe’s and China’s economic and financial debate being a case in point).

      Developments such as the global trend towards integrated reporting is good news for communication professionals. Their contribution to value creation in the organisation is now reflected in a report that is regarded as essential for giving feedback to stakeholders. On top of this, accountants, auditors and third-party assurers are involved in calculating the ‘communication contribution’ that we make in terms of, amongst others, stakeholder relationships and corporate reputation . What more do we as communication professionals want?

      Talking of “reading newspapers” … COP 17 (www.cop17-cmp7durban.com) is currently taking place in South Africa. Even if we want to, we cannot ignore the triple context challenges of our time, whether you work in or for business, government or civil society. Creating wealth means creating prosperity for all stakeholders (note that prosperity refers to general well-being and not necessarily financial well-being) – greed in all its forms is frowned upon.

      O, and last I heard, Mr Buffet gave away most of his fortune to, hmmm …. a Foundation (?) Looks pretty much like CSR to me.

  16. What about considering integrated reporting to find out how someone else evaluates your business in the eyes of community and not necessarily as a compulsory requirement with legal or environmental consequences, which is just taking advantage of business fears in my opinion. In this respect capitalizing on results seems the most pertinent comment here as well as channelling communication it can be.

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