Key board members and past leaders of the International PR Association have resigned to protest what they see as abuses in financial reporting and governance including the dissolution May 5 of the IPRA Council (the 74-member legislature of the group).
This reporter, a member of IPRA for many years, sees many parallels between IPRA and PR Society of America although in this case IPRA is doing something even worse—abolishing what is the equivalent of the PR Society’s Assembly.
The Council would be replaced with four officers and one director from each region of the world. The latter are yet to be named.
Under protest is the election of Johanna McDowell of South Africa as president for 2012.
The dissolution of the Council was declared at the May 6 meeting in Brussels but there are many members who question this action, noting that only the Council could dissolve itself.
An announcement May 13 by 2011 president Richard Linning said the last five IPRA presidents, operating under the new constitution, have “submitted its report on the membership and eligibility for election of the new governing body and for the conduct of future IPRA ballots.
The last five presidents are Linning; Elizabeth Ananto of Indonesia, 2010 president; Maria Gergova of Bulgaria, 2009 president; Robert Grupp of the U.S., 2008 president, and Philip Sheppard of Belgium, 2007 president.
A number of members are in open revolt against the leadership of staff CEO James Holt who at one point resigned last year. The resignation was accepted by Ananto. Dissidents feel he should not have the title of “ CEO.”
Holt appears to be back at the helm although Ananto has complained that his $80,000 salary takes up about 80% of the income of IPRA.
Dissident board members, including Ananto, claim they do not get adequate financial reports. They are upset that Nigel Chism of the U.K. has been treasurer since 2000 when there is a four-year limit for that office.
Tempers have flared on both sides of this dispute resulting in threats of lawsuits and legal opinions obtained from lawyers. Two dissident directors have been “suspended” from the board for several months as “punishment” for not toeing the line. They disputed such suspensions as improper and unwarranted.
Among those resigning in protest are former directors Don Stacks of the U.S.; Jennifer Hardie of United Arab Emirates; Volker Stoltz of Germany; Srba Jovanovic of Serbia, David Donahue of Australia, former Council head.
Lawyers Add to Poisonous Stew
Some members are particularly upset at the creation of a new U.K. corporation that will handle some of the affairs of IPRA.
Certain IPRA leaders are playing the same odious legal card that we see at the PR Society—invoking state or government laws as superior to an association’s own laws which is junk law in our book.
The assertion that a group’s laws “really don’t count” leaves members at the mercy of whoever is interpreting state or government laws.
Every time a delegate suggests at a PRS Assembly that the board do something, a lawyer for the board pops up and berates the delegate by saying the Assembly must never, ever tell the board what to do since that is a violation of New York State laws. Such laws are said to “trump” PRS bylaws.
That is nonsense since the boards of lawyers, doctors and accountants and many other professional groups take orders from their “Houses of Delegates.”
An attempt in 2006 to bring PRS in line with the ABA, AMA, AICPA, etc., was defeated by the APR-dominated Assembly.
Robert’s Rules, described as the “authority” for the Assembly, say unequivocally on page 49 that an “assembly” elected by members (and which then elects directors) has “full and sole power to act for the entire organization.” Page 9 says a board is “subordinate” to such an assembly.
Poor Financial Reporting
There are numerous complaints that directors and even officers of IPRA are not getting full and timely financial reports. Latest figures on the IPRA website are for the year ended Dec. 31, 2009 and show an operating loss of 18,277 British pounds on revenues of £204,798 including £81,907 cost of sales and £141,168 administrative expenses. Net assets were £319,205, a decline of £16,101.
Poor and no financial reporting at all is a hallmark of PR groups that run into trouble.
The PR Society has posted its 2011 first quarter results in the members-only area of its website with no explanation attached.
Revenues gained only $14,457 to $2,406,824 while expenses rose $101,269 to $2,249,139.
The real story, and insiders taking good care of themselves is another hallmark of groups heading for trouble, is that salaries/fringes rose 8% to $1,390,314 or 57% of revenues of $2,249,824.
For a group the size of PRS, salaries/fringes should be less than 40% of revenues.
Society leaders for the past two years have withheld IRS Form 990 from Assembly delegates. That form shows the salaries of the six highest-paid staffers.
Insiders Feast at “Leadership Rally”
Another sign of PRSA insiders feasting is the annual “Leadership Rally” (actually a “Loyalty Rally”) that will take place June 9-11 (Thurs.-Sat.) in New York.
The 17 section heads and 10 district chairs have now been added to the 110 chapter presidents-elect who get $550 towards their “June weekend in New York” for an outlay of $75,350.
In addition, each gets five free meals worth at least $200 (including an all-expense paid dinner at a Class A New York restaurant Friday night) for another $27,400 for a total of $102,750 in grease to the compliant presidents-elect.
Many of the 137 can be counted on to toe the board’s line at the Assembly.
This largesse is bestowed at a time of austerity for the Society which led treasurer Phil Tate to say April 12 that an “incredible $1.5 million has been cut from operating expenses” and that there is “no room for further cuts and no obvious sources of new revenue.”
Staff pay/fringes and buttering up the voting delegates are barred to the budget-cutters.
As usual, rank-and-file members are unaware of this feast by the insiders. There is no mention of the “Rally” on the PRS website.
The “Rally,” started in 1999, is supposed to help chapter officers expand their chapters. But PRS membership of 21,000 is only 1,400 over the 19,600 membership of 1998. All proceedings are off-the-record and no reports are ever made to the members.
Although PRS pledges transparency and openness and says ethics is the main concern of members, it won’t let us join, which impedes our coverage of it.
Other PR groups including IABC, New York Women in Communications and Publicity Club of New York have no problem with us being members.
IABC, OPC, PCNY Hurt by Mismanagement
Some members fear the current crisis at IPRA could spell its doom or bring it to its knees. It’s in the middle of its biggest money-maker, the Golden World Awards.
Winners, who paid 230 British pounds per entry, will be announced later this month and awards will be made at a banquet in the fall.
IPRA, whose membership has declined from 1,000 or so to under 500, say senior members, has stiff competition from the European Assn. of Communication Directors, a corporate group founded in 2006 that now has 1,600 members.
Key elements of other PR group crises are present—withholding financial information, struggle for control, threats of legal action, management mistakes, and evidence that a ruling clique is favoring itself financially and otherwise.
Such a crisis hit the International Assn. of Business Communicators in 2002-04 when an ill-conceived website called “TalkingBusinessNow” cost IABC about $1 million and resulted in a deficit and extraordinary fund-raising activities.
CEO Elizabeth Allan felt she had been defamed by former president Lou Williams and sued both him and IABC. Hundreds of motions were filed in an unusually rancorous legal battle. IABC initially hid the lawsuit from members. A settlement finally came in 2004. We estimate the legal costs to IABC and Williams were $100,000+. The suit against Williams (link, sub req'd) said he would have to pay no more than $1 million.
PCNY Was Embezzled
The Publicity Club of New York had 800 members in the mid 1980s when alleged misappropriation of funds and poor management almost killed it.
“Smoking gun” for those who charged insider abuse was the awarding at one holiday party of valuable prizes to officers including an all-expense-paid one-week vacation in Barbados for two.
PCNY, whose membership dropped below 100, had at least 50 members with lifetime “free rides” including ex-presidents.
I thought the PCNY abuses started when longtime professional association manager Tom Kenny was ditched and a clique of insiders took over.
OPC Lost Building
The Overseas Press Club of America almost went under seas in the late 1960s after Club manager Frank O’Rourke embezzled it out of about $300,000.
Financial reports were sketchy and OPC members held several rancorous meetings in an attempt to win information and get control of costs.
OPC and its Foundation conducted a fire sale of the Foundation’s 11-story building on 40th st. across from Bryant Park. Membership plummeted from 3,800 to less than 200 and is now about 500.
O’Rourke committed suicide on the day before he was to report to police h.q.