“Tell it like it is became tell it like the lawyers love to hear it,” he wrote.
He added: “Over the past five years, profiling hundreds of companies for the Chicago Sun-Times, I’ve seen an amazing syndrome of nervousness, terror and paralysis grip the C-suite, the financial department and IR.”
He expressed sympathy for “those hapless souls laboring in the communications vineyard.”
Financial Relations Board, founded in 1965, which Pincus and 27 stockholders sold to True North Communications in 1999 for $33 million in stock (and payoff of a $5M debt), had 291 employees and about $30M in fees.
FRB listed 550 clients by name covering two pages in the 1999 O’Dwyer’s Directory of PR Firms.
After its absorption into the BSMG unit of Interpublic, which had purchased TNC, and later into Weber Shandwick, it no longer listed clients separately.
Kathy Fieweger, executive VP and general manager of MWW based in Chicago, who heads the FRB brand, said it is still in use but is also fully integrated into MWW.
MWW, she notes is a full-service firm whose offerings include corporate communications, crisis and issues management, financial communications and IR, consumer and lifestyle marketing, digital, design and social media.
Pincus said he was present at the birth of IR, including the founding of the National Investor Relations Institute in 1970, and that he was “saddened” by what he saw.
NIRI’s membership peaked at 5,000 in 2000 and is currently 3,500. The number of public companies has shrunk in recent years due to mergers and economic reasons.
Pincus wrote that shy CEOs were cajoled into making many more public appearances.
“Formerly intimate conference calls blossomed into global teleconferences for hundreds of participants and finally into webcasts with streaming video every quarter,” he wrote.”
Editors were courted and CEOs prepped. Wall Street acquired “greater confidence” in management, he feels. About 70% of companies were providing regular “guidance” about future plans and expectations.
However, he noted, “the market bust, Enron, Sarbanes-Oxley and other wet blankets arrived to douse the fun. Business pulled in its horns. A puritanical over-reaction swept the land. Lawyers took control and muzzled management. In many companies, the doors slammed shut. Media became pariahs, fearsome annoyances rather than windows to the world.” IR started hiding behind “voicemail and e-mail veils,” he wrote.
FRB listed 550 clients by name covering two pages in the 1999 O’Dwyer’s Directory of PR Firms
No longer did “fearless CEOs face reporters and score extra points for their companies by sheer charisma,” wrote Pincus.
Companies forgot that non-financial factors could be crucial in determining stock prices, said Pincus, quoting author Baruch Lev of the Stern Business School.
Sarbanes-Oxley, passed in 2002, set fines and jail terms for misleading financial reporting.
“Filtered fluff became the mode,” wrote Pincus.
PR veterans say most communications between companies and reporters now consist of e-mails vetted by the legal and financial departments.
Although Pincus wrote that the former “road shows” in which CEOs toured the U.S. to meet analysts and investors, had flipped to “a webcast,” some IR veterans said road shows are still being used.
The mergers & acquisitions specialty blossomed for a number of firms including Kekst and Co., Brunswick Group, Sard/Verbinnen, Abernathy MacGregor Group and Joele Frank Wilkinson Brimmer Katcher.
Brunswick handled 44 U.S. deals through June, 2011 worth $104 billion. It led worldwide with 105 deals worth $138B.
Sard/Verbinnen was second with 47 deals worth $102B.
One of the largest deals was Johnson & Johnson’s $21B acquisition of Synthes GmbH, handled by Kekst, a unit of Publicis.
Pincus remained hopeful that “history will repeat itself” for the benefit of investors, the economy and IR/PR people and that openness and transparency will return.
Among his activities after leaving FRB was serving as a finance professor at DePaul University.