A Plea to CEOs: Respect Your Flacks

by lisa ~ January 29, 2009

I’m curious about Merrill Lynch’s corporate structure. Surely there’s someone within the executive management team who represents corporate communications. Did this person advise John Thain that redecorating his office - and spending absurd sums on an area rug, a garbage can, an antique commode, and other non-essential items - would be a public relations nightmare?

No, probably not.

It’s not as if most CEOs solicit the opinions of their underlings, particularly those who oversee fluffy things like PR. (To be fair, the majority of CEOs I have worked with expect employees to address them frankly. Unfortunately, they seem to be in the minority.)

I propose that it’s the responsibility of the executive VP of corporate communications to whisper the truth about a potential backlash in the CEO’s ear. And, conversely, it’s the CEO’s responsibility to create an atmosphere in which his closest advisors can speak plainly and directly.

It’s possible that Thain has started a trend toward “shabby chic,” says Robert Shrimsley of the Financial Times. “So the mood music surrounding John Thain’s ousting - and the shocking realisation that corporate excess might now actually be frowned on - is surely set to usher in a new era of austerity in financial fashion. Corporate jets and antique commodes have no place in the new world,” he wrote.

I’d like to believe that but history continues to repeat itself. Remember Tyco CEO Dennis Kozlowski, who reportedly spent company money on a $15,000 umbrella stand and a $2,200 garbage can?

I offer the following advice to the remaining masters of the universe: Ask your public relations executives if your plans to redecorate your office, buy a corporate jet, or make other extravagant expenditures - particularly as you hover on the brink of insolvency - could pose any problems with the company’s many stakeholders. Then accept their advice. Without question. Without retribution.

To read the full Financial Times article, click here.

Lisa Tibbitts is a corporate communications expert with extensive experienced in financial services. She is based in New York.