On a Chicago stage, where the current production is “Enron,” the company’s Board of Directors are portrayed as three blind mice.  Certainly, the Enron Board’s epic failure is well documented, but more recent failures by various organization’s Boards of Directors (from Olympus to HP to Penn State to the Susan G. Komen Foundation) reveal an ongoing Achilles’ Heel that goes way beyond effective corporate governance.

Over my career, I’ve worked with countless CEOs — many of whom have correctly involved their Boards of Directors on matters of strategic importance.  And, to be sure, when large organizations face serious reputational issues, they often involve in-house corporate communications people and bring in external PR counsel.

But, I think a strong argument can be made that many serious issues could have been avoided or mitigated at the Board level before they rose to a crisis.  Corporate communications people have their fingers on the public’s pulse, so we can and do anticipate issues well and provide valuable insights into taking advantage of market opportunities.  The problem is: very few company Boards of Directors include executives with corporate communications backgrounds or expertise. This is a surprising and noteworthy omission.

Certainly, Boards benefit from the presence of executives with diverse corporate, financial and academic backgrounds.  And, many executives have solid instincts and experience dealing with communications/perception issues.  But, few of them are experienced in and attuned to identifying and addressing public perception issues at the early stages — when they are invariably easier and less costly to fix.

It’s difficult to find any public companies with communications executives currently on their boards of trustees (Yum Brands is a notable exception, but one wonders how active its board was in its Taco Bell subsidiary’s 2011 bruising battle with the plaintiffs’ bar).   Notably, among CEOs, only two — Brian Tierney (of Philadelphia Media Holdings) and David D’Alessandro (of John Hancock Financial Services) — immediately come to mind as having a PR background (vs. overseeing PR).

Would a PR person on HP’s Board have encouraged a more disciplined and thoughtful approach to  selecting CEO Mark Hurd’s successor?  Likewise, if a communications professional were on the Board at Olympus, what would they have recommended when’ CEO Michael Woodford asked the Board to investigate a series of acquisitions led by the company’s chairman?  Finally, though they eventually brought in outside PR counsel, how different would the recent fiascoes with Penn State and others have turned out if they’d had PR at the decision-making table?  I guess we’ll never know, but there are thousands of companies out there who would be advised to think more broadly when filling their next open Board seat.

There’s a story rocketing around the PR agency world this week about a PR firm that finds itself in a very ugly and avoidable fight with a prominent blogger. (NSFW) It’s a great and timeless cautionary tale.

There’s an old saying about not picking a fight with someone who buys ink by the barrel.  Of course, this is meant to suggest caution about doing battle with a member of the media.

But with most newspapers, radio and TV news in decline, along with the rapid ascent of bloggers, I think the saying should be updated to the headline of this post.

In this case, the PR firm sent a pitch to a blogger who didn’t care to receive it.  Blogger said so (in typical blogger way) and got a snarky reply from the pitcher at the PR firm.  Blogger (who, by the way, had over 160,000 followers — compare that to the readership of your average daily newspaper!) sent back another typical blogger reply (a bit flip and edgy).

This was followed by a foolish “reply all” from the PR firm (that included said blogger).  Well, after this bonehead maneuver (which nearly anyone could have done), the blogger apparently gave the PR firm VP a chance to walk his NSFW comment back, but, no, instead, he decided to double down on snark.

And, gee, what do you think the blogger decided to do about this whole exchange?  Publish it!

Sigh….

Setting aside how this reflects on the whole PR agency world, it was just plain dumb to think that this firm could do (inept) battle with a blogger and come out a winner.

So, what are the lessons here:

Lesson #1 — Treat respectable bloggers (especially those with six-figures worth of followers!) with at least as much respect as you’d treat a reporter from The New York Times.  If you have an issue with something they said, or wouldn’t include in their coverage, etc., sure you can address it with them, but….

Lesson #2 — Assume that anything and everything that you put in writing to/about a blogger will find its way to said blogger (and everyone who follows him/her…and so on….and so on).

Lesson #3 — Once you’ve done your damage, the only thing left to do is give an unqualified apology to the blogger (and the world), and give your staff some remedial training.

A couple of news stories caught my eye recently. Left unaddressed, the issues they cover spell danger for many companies.

The first is from today’s Wall Street Journal.  The story focuses on a Corporate Executive Board Co. (CEB) study of 4,300 employees exiting 80 companies, most with more than $2 billion in annual revenues. The study indicated that more than 75% of these employees wouldn’t recommend their employer to others — an astonishing number — and, according to the CEB, the highest percentage in at least five years.

The other seemingly-unrelated development is a proposal by the National Labor Relations Board (NLRB) that would have the effect of dramatically accelerating the speed with which labor unions could hold elections.  The U.S. Chamber of Commerce and other business groups have expressed concern (and initiated legal action), stating that this change tilts the labor-management dynamic too far in labor’s direction.

So, why should companies be concerned?  Even though support for and membership in labor unions is at historic lows, and many industries have historically been poor or non-existent targets for labor unions, the fact that more and more corporate employees are disgruntled makes them an incredibly-attractive target now.  Couple this with the possibility that the unions may be able to launch an accelerated run on a companies’ workforce, it’s probably only a handful of companies on Fortune’s “Best Place to Work,” “Best Companies for Working Mothers,” and similar lists that can afford to be complacent.

To be sure, during the downturn, many companies had little choice but to put in such steps as pay freezes, hiring freezes, benefits cuts and staff reductions.  But with many companies now sitting on records amounts of cash, the unions can and likely will exploit the dichotomy of “employees who’ve had to sacrifice” with “companies sitting on millions.”

What can prudent companies do?  Of course, it begins with communications — outlining for employees what the company’s business and financial prospects look like and dealing head-on with any cost cutting measures in which employees bore the brunt.  Why did you do what you did and how long do you anticipate leaving these changes in place?  What other expenses (esp. those that didn’t directly affect employees) did you cut?

Do you still communicate top-down only or do you allow for upward and omnidirectional communication?  Are your front-line supervisors adept at communicating? Are you listening to what your employees (and ex-employees) are saying about you on social media?

Beyond that, a prudent review of HR practices is called for.  Are you still benchmarking with competitors to make sure your compensation and benefits practices are in line?  Did you allow your managers to forgo performance reviews?  Do you provide for 360 reviews?

Given the ongoing uncertainty in the economy, some of these steps may seem like luxuries to some companies.  But, with the alternative being the departure of more of your best and brightest, along with the specter of unionization, can you afford not to?

About once a month, I read about one PR firm after another buying itself back from an acquirer.  The latest is Brodeur buying itself back from Omnicom.  A few weeks back, MWW bought itself back from IPG.

What’s behind all of this? I know my friend Rick Gould makes a number of compelling arguments about selling one’s firm, but, in order to convince me, I’d need to meet an agency principal who’s happy they sold several years later.

I know that doesn’t mean they don’t exist, but its hard to envision retaining your culture and approach if someone else is controlling the purse strings.

I’m aware of firms such as MDC Partners that take a slight majority position and let the agency principals “keep doing what they’re doing.”   Count me among the skeptical.

One of the things that motivated me to start my own firm was being able to get out from under people who told me what I could and couldn’t do.  If you sell your firm (or even a minority stake), you’re undoubtedly giving (at least some of) that up.

I try “never to say never,” but as long as I still see a long flight plan ahead and can continue to use ongoing cash flow and, if necessary, a line of credit to fund and grow my business, flying solo is the way to go — at least for me.

While much of the country’s attention has been focused on Wisconsin, Indiana and New Jersey’s attempts to rein in pensions and other benefits afforded public union members, the activities of private unions and their attempts to reverse their decades-long decline in membership continues.

Those of us who make our livings helping companies communicate with their unionized and/or hourly employees are well versed in union tactics and methods.  But, occasionally, we get an unusually-deep view of some of their thinking.

A presentation this past weekend by a former SEIU official is particularly illustrative.  In it, Stephen Lerner talks about causing a stock market crash, bringing JP Morgan to its knees and redistributing wealth.

Shocking, to be sure, but with the economic turmoil of the past few years, this could resonate with some — even many — members of the public, including your employees.

Yes, he’s no longer affiliated with the SEIU, but this kind of thinking, statement and approach (rallies, civil disobedience, attempts to embarrass and vilify corporate leaders) can be seen in many of the unions’ “corporate campaign” rhetoric — except in this case, they’re certainly being taken to an extreme.

What’s the lesson here for corporate leaders?  If you have a large hourly workforce that’s non-union, it’s a good idea to take a look at the areas of vulnerability that unions exploit – pay, benefits, working conditions, how people get hired and promoted, how employees with seniority are treated, etc.

If you already have a union on the property, whether you are in the midst of a contract negotiation or that’s years away, it makes sense to look at productivity, absenteeism, safety, etc.

And, whether you’re union or non-union, it’s always a good idea to use employee communications to reinforce the compact and benefits your company offers — and give your employees an opportunity to share their views and opinions.

Either that — or you might end up thinking a governor’s job is easy by comparison.

A great deal of attention has focused recently on the hidden camera video of executives from ACORN and Planned Parenthood saying, well, things they’d rather not be caught on hidden camera saying.  In addition, a blogger recently pretended to be David Koch, the billionaire businessman, and called Wisconsin Governor Scott Walker during the protracted legislative battle over collective bargaining for public unions.

It’s not just politicians and activist groups that should view these developments as cautionary tales.  Any public-facing company concerned about corporate reputation management should take these lessons to heart.

What would stop someone from walking into, say, a bank branch, investment company, hotel,  homebuilder, food retailer or other business and find a way to “trap” the company’s employees into saying something illegal, unethical or troubling.  It’s not just the likes of “Dateline NBC” or ABC’s “What Would You Do?” who can use a hidden camera and a website.

Who would do this?  A plaintiff’s attorney looking to gather data for a potential class action or to provoke a quick settlement; a union seeking support or probing a company’s weaknesses; an activist group looking to energize an existing campaign; a disgruntled former employee or customer; even an unethical competitor.  The list is nearly endless.

So what’s a company to do?  First, before something like this happens to you, take a look at your company’s products, services and approach to customer interaction.  Would everything pass the “smell” test?  Are there some things you do or sell today that, regardless of how profitable they are, should be eliminated or phased out before your company comes into such scrutiny?  Are you getting a lot of customer complaints directly or are people venting about your company on social media? It’s much easier (and “cleaner”) to do away with these things before it appears you’re being “forced” to do so.

Next, you should focus on effective employee communications and training.  How much does your company focus on ethics and ethical behavior?   Is there a communications channel to allow employees to surface concerns to management?  Are you monitoring what’s being said about your company on social media?  Some enlightened companies use “secret shoppers” to ensure — and test — the consumers’ experience is what the company intends.

The lesson here, as is often the case, is not to wait until a problem occurs before you plan for it to happen.  Or just wait until Phil in your Des Moines office is the latest star of YouTube.

You have to feel badly for Northwestern University.  They have a richly-deserved history for academic excellence, a resurgent football program, and even an improved reputation as a neighbor in our shared city of Evanston.

But, given their mishandling of the recent scandal involving a  live “demonstration” following a Human Sexuality class, they should probably cancel their curriculum on crisis management.

With a lot of tenured faculty on campus, and the attendant academic freedom, there’s probably a lot of things that go on in the name of education that might not stand up well to broad (outside) scrutiny.  Maybe that’s why the University’s spokesman said the following about the demonstration:

“Northwestern University faculty members engage in teaching and research on a wide variety of topics, some of them controversial and at the leading edge of their respective disciplines. The university supports the efforts of its faculty to further the advancement of knowledge.”

If the University had even a small sense of the outrage that was bound to ensue, they probably wouldn’t have gone with such a staunch defense of such a questionable display.

If they had simply made a statement indicating “concern” and promising an “investigation” as their first response, it might have tamped down the outrage.

But, instead, they waited a day and then let their president express his displeasure.  That effectively served to turn what could have been a one-day, largely local news story into one that is now in its third day – and showing few signs of abating.

The lesson here is: first responses count.  A lot.  And, when in doubt, assume that people will take offense and, be darn sure that something like this is worth defending.

A similar, recent case involved Amazon.com defending its sale of books promoting pedophilia.  Is that really something you want to defend?

Recently, American Airlines decided to pull its flight listings from Orbitz, citing the desire to retain the fees associated with booking flights. A short time later, Expedia joined the fray, first burying and then blocking American Airlines’ flights from its site, citing what it called the airline’s “anti-consumer, anti-choice” business strategy. American responded by encouraging people to go to its own site (“featuring our ‘Best Fare Guarantee!’”), another travel site like Kayak.com or Priceline.com, or a travel agent.

The problem with commercial disputes like this one (there have been a growing number of others, including Cablevision vs. Fox, a brewing (sorry) one between Kraft and Starbucks, and, of course, the “granddaddy” of them all: Ford vs. Firestone ) is that when they play out in the public, they implicitly or explicitly ask consumers to pick sides. That’s risky. Sure, a company can frame up – in short copy – a nice ad that says why the other company is wrong, but these disputes – especially if they’re not resolved quickly — end up hurting both companies’ reputations.

Added to the mix is when one or the other of the companies already has a difficult reputation (something that’s quite common in the airline and cable industries). Then, not only is it more difficult for the companies to get consumers to “take their side, ” but they are effectively reminding people why they didn’t like them in the first place.

The better course of action is for companies that have a likelihood of a commercial dispute a sustained, long-term corporate reputation program. It’s only when that broad-based understanding and reservoir of goodwill are built can you take a shot at another corporate player and expect to win the court of public opinion.

Corporate earnings are up dramatically. Many companies are looking to use the cash they’ve accumulated to enter the M&A arena. Others are eyeing possible IPOs as the markets begin to make a comeback. Despite these positive signs, a troubling trend is emerging among some companies: a deep reluctance – even fear – to tell their corporate stories.

To be sure, it hasn’t been easy to be a corporation the past couple of years. CEOs from the banking and automotive industries were being hauled before Congress, blamed for the economic collapse, and often flayed in the media. At the same time, traditional media has been hobbled, while social media and the blogosphere (where no editors and few standards reside) have seen their influences increase exponentially.

But now that business isn’t universally seen as the “bad guy,” many companies are still “lying in the weeds” and only answering the phone/emails when – or if — the media or other stakeholders come calling.

That’s a mistake. Beyond the lost opportunity this represents, not controlling and telling your story leaves your company vulnerable to all kinds of negative consequences the next time you miss a quarter, your board decides it’s time for a new CEO, a competitor’s actions bring scrutiny to the industry, or an unexpected homegrown crisis or issue emerges.

Just as importantly, not every company in an industry is staying quiet. The forward-looking ones are preparing their senior leaders for media interviews and seeking them, taking stands on issues of importance to their industry and the economy, and gaining support for their strategic business initiatives. These are all activities that have been demonstrated to drive shareholder value, attract and retain employees, and help companies thrive in a down economy.

Prudent CEOs and chief communications officers are assessing this changed landscape, developing and implementing sound proactive communications plans and strategies. As they do so, they are controlling their own destinies – and reputations.

Though I spent nearly eight years in senior management roles in the world of “big agency” (Ketchum and Edelman), I’ve now been away from it at least that long, so I sometimes forget what it was like. Attending a couple of recent Council of PR Firms events recently brought back a lot of memories.

To be sure, there are a lot of great things about working at a big firm. Chances are most PR people (clients) have heard of and have some familiarity with your employer’s brand. Chances are also very good that potential business is going to flow your way via the numerous RFPs that get issued every month. It’s also fairly easy to hire staff when you work at a big firm – candidates come calling on you. And, of course, you get to work alongside a lot of fun, creative, smart, hardworking people – as you work on big, blue chip clients. That’s all good.

But, after that, it starts to look a little less good. Those RFPs? They’re your lifeblood. And if you’re not “on the list” (or, worse, don’t win “enough” of them), you could be in trouble. And the problem is: so many RFP responses look alike – and the business is often awarded for some reason that had nothing to do with the RFP. And, even the best big PR firm only wins about 1 out of 4, on average.

Then there’s financial management. You have to make sure your staff is billable – not just generally billable, but reaching specific, individual targets “set by New York (or Chicago).” If you happen to have staff that fall below that target, you get to do things like fire people, make them take pay cuts or give up vacation so they can come in and bill some more.

At a big firm, chances are you have fewer, bigger ($1 million+) clients. With said big clients, you assign a team of people. That team likely spends 90% of their time working on that one client. Two things inevitably result: 1) some of your employees will conclude that, if they’re going to spend 90% of their time on one client, they might as well actually go to work at that client. And, 2) if that client goes away (and you’re not able to immediately replace it), chances are you’re going to have to immediately lay off all of your staff that was on that account. No fun.

It’s not all sunshine and roses here in the world of boutique PR firms. Recruiting isn’t easy and we’re not on many RFP lists. We have to go source business and candidates for ourselves. And we can’t fall back on a time-tested global brand to wrap ourselves in if things go wrong.

But I wouldn’t trade places for all the tea in China…..