| The world has woken up to ethical issues in corporate | | | | (FUD). Successful FUD pushes to show how you |
| governance & accounting practices. Corporate | | | | would be the only person who would be left in the |
| heads that were not guillotined were forced hang their | | | | race if you did not buy-in into the campaigner's |
| heads in retrospective shame. The heads that fell | | | | concept, creates uncertainty about your own analysis |
| were the victimizers, and the axe that fell, fell too late, | | | | & gut-feel and generates doubt about the |
| and the punishment received, was way too little | | | | products or services currently under use. This |
| compared to the suffering, pain and financial losses | | | | especially works wonders in a greed-struck stock |
| that the organizations' stakeholders suffered. Trust of | | | | market, where more often than not, mob-psychology |
| millions of investors was lost overnight. | | | | rather than knowledge is the deciding factor. |
| Ethics in governance is one part of the story, the other | | | | Usually such scams are orchestrated in connivance |
| link in this dubious chain of deceit is usually the | | | | with some unscrupulous public relations companies. At |
| professional services like auditing, legal and public | | | | other times, the PR companies usually have enough |
| relations which work closely with the organization. | | | | pointers to the possibility of such a scam about to take |
| Such large scale deceit becomes possible only with | | | | place. Press conferences are called, headlines blare |
| the active collaboration of these so-called 'professional' | | | | out the superlative performances of the organization, |
| services. Hardly professional, really! | | | | there is talk of new acquisitions, investor meets |
| The Indian investor has been victim to a lot of | | | | happen and stock analysts are shown the factory, the |
| companies attempting to make a quick buck in the | | | | plush office to generate confidence in the investor. The |
| markets. While caveat emptor - let the buyer beware, | | | | PR agency is rewarded for its great 'efforts' by way |
| is the legal term that organizations to get out of such | | | | of a few millions and the investors collective gets |
| wrangles, it is necessary to look into how these | | | | duped for a few billions. Case studies of this century in |
| various scams are done, and to recognize the role of | | | | such dubious PR in India would include the CRB scam, |
| the professional services, especially public relations in | | | | MS Shoes, Harshad Mehta & Home Trade fiasco. |
| creating and sustaining the scams. | | | | While these are the few stories which come to light, |
| Circa 1994. Every Indian remembers the bloody | | | | there are many scams which get away without even |
| battlefield of the stock markets. While the aftereffects | | | | getting noticed. |
| are well embedded in everyone's memory, few | | | | What is the responsibility of the public relations |
| remember how it all began. Upbeat stock stories in the | | | | company in such circumstances? The agency must |
| newspapers, stories of millions being made overnight, | | | | evaluate the client and understand program and take a |
| the oldest stock exchange of the country celebrating | | | | view that is beyond just the fees that it will generate |
| the index at an unprecedented high. Stock market | | | | and take a responsible decision. The PR agency can |
| pages kept the upward arrow next to almost every | | | | & must become the watch-dog for the |
| stock price quoted indicating the trends. Investors | | | | companies, advising them, guiding them and if nothing |
| scrambled, dinner conversation revolved around the | | | | prevails, then going to the extent of resigning the |
| stock prices, 21 year olds were sitting in front of | | | | account for of a larger good. This kind of discussion, |
| red-blue flashing computer screens, buying and selling | | | | though popular conversation in PR cocktail circuits, is |
| tens of thousands of shares in seconds. | | | | still eschewed by the PR intellectuals in more serious |
| While some companies were actually performing well, | | | | forums! |
| many slipped through the back-door and slipped up | | | | Unless we work as a committed community on the |
| their shares to unwary investors. Why is the investor | | | | principles that should guide the PR business; and take |
| so gullible? And is the investor really so gullible? | | | | stringent action against those who use these |
| The method that was used to market the fly-by-night | | | | tools-of-influence to feed their greed, the respectable |
| companies to the investors combined the well-used | | | | business of PR will go to the depths of unrecoverable |
| public relations concepts of fear, uncertainty and doubt | | | | ignominy very soon. |