Now in the interest of my own transparency, I know Nick Ashooh, and sit on a board with his brother Richard, and I have the greatest respect for both of them. And I can't imagine what Nick's life must have been like for the past few months. My heart goes out to him and his family, because he probably has one of the worst jobs in America these days. I know, because I also know what it's like in corporate America. I'm intimately familiar with the antiquated logic that tends to prevail in board rooms.
Because he's my friend, and I have a dim view of many old-fashioned corproate executives, I'm assuming Nick gave them his best advice, and they ignored it.
But the point here is that PR's role is increasingly one of getting people to stop doing stupid sh_t. Every day we read thousands of blog postings, articles, and comments to learn how people react to stupid things that organizations are doing. (We also get to read the positive stuff, when people applaud organizations, and thank them, so its not all that depressing a job.) This isn't rocket science, we literally sit around and read this stuff.
When the ire reaches a high enough level of intensity, we send off an alert to our clients saying they should pay attention to it. Sometimes we even suggest what they can do to solve the problem. In reality, they probably can't do much. Senior management is still stuck in the dark ages when people thought you could spin your way out of anything, that they just can't bear to open their eyes to the bright sunshine of this new era in which customers, clients, and in this case legislators, can get behind your "firewall" in a nanosecond.
The role of PR is to build relationships, and nothing damages a relationship faster than lies and obfuscations. And in today's world it happens even faster and has far greater financial consequences.
In reality, companies ultimately have no choice but to be more transparent if they have a prayer of restoring the public's trust in their institutions. It's not just that AIG was idiotic in trying to cover up its role in the conference, its that in doing so, AIG further compromised whatever trust the public, and its elected officials, may have had in the organization.
I haven't done a formal measurement of their trust level, but I'm guessing from the comments I'm reading that its dropped even faster than AIG's stock price.So my question is: When will the C-suite wake up and realize that people will only regain trust in these institutions if they are utterly open and transparent. (I know, only when they fire all the lawyers) But seriously, do the math. The cost in reputation, failed relationships, lower trust, and now, government support, far outweighs whatever perceived cost that transparency may entail.