MDC ACQUIRES SLOANE

MDC Partners, the mini-advertising conglom, has acquired a majority stake in Sloane & Co., the New York City financial firm that has counseled New York Life, Walgreens, TiVO and Boone Pickens’ wind energy project.

Elliot Sloane believes the partnership with the Toronto-based diversified communications shop represents a “great validation” of his business. He likes MDC chief Miles Nadal’s track record of investing, mentoring and providing resources to top-tier firms.

MDC’s units include Crispin Porter & Bogusky, kirshenbaum bond senecal + partners, Lime PR & Promotion and Fletcher Martin.

Nadal is bullish on PR. He says the “innovative initiatives happening in marketing communications today are happening within the public relations arena.” PR’s strength is the ability to “deliver measurable results in a shorter and shorter time frame,” he added.

Publicly traded MDC is listed on the NASDAQ. Shares are trading at $10.85, off a bit from their $11.20 52-week high. The period low was $3.21.

CONE MOVES TO EDELMAN

Carol Cone, founder of Omnicom’s Cone who left the firm after nearly 30 years last month, has joined Edelman.

Cone, who is closely associated with cause marketing, said last month that she was inspired by a meeting with the Dalai Lama to pursue ventures in social issues.

At Edelman, she’ll counsel clients on “corporate and brand citizenship,” along with cause and public engagement strategies, the firm said. She’ll also work to apply data from the independent firm’s annual goodpurpose, Trust, and Health Engagement studies.

Cone said: “We live in a reset world, where business and society must partner for mutual benefit.”

GC BEVERAGE LEAD PROMOTED

Gerry Gunster, the Goddard Claussen executive VP leading the American Beverage Association’s attack on proposed beverage taxes, has been promoted to partner of the public affairs firm.

Gunster is an EVP and executive director of the firm, where he’s served as co-founder Ben Goddard’s deputy for the past 10 years. Gunster has led the ABA’s anti-tax push in several states and nationally, including a current PR and advertising showdown with New York Gov. David Paterson.

He was previously a Hill staffer and held posts at Joseph E. Seagram & Sons, Tropicana Orange Juice Co. and the Grocery Manufacturers of America.

‘I LOVE NEW YORK’ WANTS PR PITCHES

New York State is seeking pitches as it reviews the PR portion of its iconic “I Love New York” tourism campaign.

The Empire State’s Dept. of Economic Development released an open RFP on April 7 through May 10 for firms that have high-visibility tourism PR experience to handle national and global outreach for the account, as well as be available for other state tourism assignments. Media relations, trade show support and crisis management are among the tasks.

Primary target markets are the northeastern states, including and in addition to New York City, Canada, Pennsylvania and Ohio.

Lou Hammond & Associates has recently worked on the campaign and the RFP notes that the campaign generated more than $7M in earned media in 2009, nearly double 2008. A contracting official said there is no formal incumbent, however.

The state re-launched the 33-year-old campaign in 2008 to reposition New York tourism “in the 21st century.” Tourism is a $51 billion business in the Empire State. Lynn Kramer of the NYSDED is overseeing the RFP process. She is at [email protected]. The RFP is listed on odwyerpr.com/rfps.

APCO REPS HUAWEI

APCO Worldwide reps Huawei Technologies, China’s leading telecom equipment company, that is itching to crack the U.S. market. Huawei reportedly is discussing a deal to acquire Motorola’s networking business.

Huawei is founded by Ren Zhengfei, a former officer in the People’s Liberation Army. It was part of a consortium that attempted to buy 3Com, a network equipment maker in 2008. That deal collapsed due to Congressional worries about national security threats.

Huawei denies any ties to China’s military.

TYLER EXCORIATES PRSA POLICIES

Richard Tyler, president of PRSA/L.A. in 1986 and a Fellow of the Society, has expressed disappointment with Society policies and practices.

The “unilateral” decision to kill the printed members' directory was called “a major mistake” and Society ethics policy was termed “weak.”

Decision-making by Assembly delegates “seems to be limited and chaotic” and “information on costs and budgets often is offered extremely late or not at all,” he said in an e-mail to this NL for publication.

(Continued on page 7)

AC MAKES CASE FOR YEMEN

Airpower Consulting, which is headed by former F-16 fighter pilot Dan Swayne, has an agreement with the Republic of Yemen Air Force to contact Defense, and State Department officials to approve aid to enhance its ability to attack al-Qaeda forces.

Strife-torn Yemen is where so-called Christmas bomber, Umar Farouk Abdulmatallab, received training for his attempt to blow up a Continental Airlines bound for Detroit.

Swayne, a combat veteran of the Gulf War and Operation Iraqi Freedom, served as military analyst for the U.S. Air Forces Central Command.

As country desk officer, he worked in Yemen, Oman and the United Arab Emirates to forge ties with their air forces.

A broader proposal concerning economic development and tourism has been ironed out, but not yet approved by the Government of the Republic of Yemen.
The attempted act of terror has captured the attention of the U.S. government, business and American people, according to Swayne's proposal. “The American public at large is ripe to learn the truth about the beautiful country of Yemen and its friendly people,” it says.

Swayne's plan calls for approaching the U.S. hotel, resort and food service sectors to “advocate for the rich opportunities available in Yemen.”

He also plans to “make contact with prominent Washington, D.C., firms who specialize in government affairs and public relations lobby” and “coordinate with the Republic of Yemen Government on which firm(s) and appropriate timing to employ these services.”

MCGINNIS GOES IN-HOUSE AT DELL

Kelly McGinnis, who headed AxiCom's U.S. operations and WPP's scuttled agency experiment handling the Dell account, Enfatico, has been named VP of global corporate communications for Dell.

WPP's Cohn & Wolfe merged Enfatico with AxiCom in January to serve as AOR for Dell and other clients. McGinnis headed the U.S. operation from San Francisco after serving as chief communications officer at Enfatico leading the PR business for Dell.

McGinnis spent nearly 20 years at Fleishman-Hillard, rising to senior VP, senior partner and GM for San Francisco before leaving for Enfatico in 2008.

PULSEPOINT GETS WALKER

Paul Walker, who was global leader of digital media practices at GCI Group and Cohn & Wolfe, has joined Bob Feldman and Jeff Hunt at PulsePoint Group to head that practice. He has devised digital programs for Dell, ExxonMobil, Wal-Mart, Genentech and Nokia.

Walker also spent a decade at Accenture, working in brand/market/business development, consulting and handling venture capital initiatives. He was recruited from Y&R/Burson-Marsteller, where he spearheaded development of markets such as China, Japan and Australia.

Most recently, Walker has been working as an advisor to the University of Texas in its effort to better engage with alumni via digital, social and mobile media.

TOYOTA PR EXEC URGED IT TO 'COME CLEAN'

Irv Miller, former group VP and head of communications for Toyota Motor Sales USA who has retired, urged a Japanese executive of the company while he was still with the company in January that, “The time to hide on this one is over.”

Miller's comments were found in an internal email obtained by the Detroit News from the thousands of documents turned over to the federal government.

“I hate to break this to you but WE HAVE A tendency for MECHANICAL failure in accelerator pedals of a certain manufacturer on certain models,” Miller wrote to Katsuhiko Koganei. “We are not protecting our customers by keeping this quiet.'

Miller warned the consequences for the company could be dire:

“We need to come clean and I believe that Jim Lentz and Yoshi are on the way to DC for meetings with NHTSA to discuss options. We better just hope that they can get NHTSA to work with us in coming (up) with a workable solution that does not put us out of business.”

Toyota declined to comment on the email but released this statement:

“We have publicly acknowledged on several occasions that the company did a poor job of communicating during the period preceding our recent recalls. We have subsequently taken a number of important steps to improve our communications with regulators and customers on safety-related matters to ensure that this does not happen again.”

HOUSTON AIRPORTS SEEK PITCHES

The Houston Airport System, which runs three airports in the five-million population region, is reviewing its advertising and PR account with an open RFP through late April.

The account includes all marketing for the airport, from PR, media relations, and a speakers bureau, to web development, ads, events and civic/community engagement.

Forty-eight million passengers went through the three airports – George Bush Intercontinental, William P. Hobby, and Ellington Airports – in 2009.

The RFP asks proposers to assume a budget of $500K for the first year of the campaign.

A three-year contract with two option years is expected to be awarded from the RFP.

Proposals are due April 23 and a bidders’ conference is slated for April 12, at the HAS Administration Building in Houston.

BL DEFENDS PREGNANCY HEALTH PACT

Bailey Lauerman & Associates has edged two competitors to defend Nebraska's "Tune" pregnancy health campaign targeting young adults.

Communications Strategies of Madison, N.J., and Ervin Group of Omaha also pitched for the account, which is federally funded by the Dept. of Health and Human Services. MS&L Worldwide's Ann Arbor office signaled intent to bid but did not submit a proposal.

Budget is $225K.

MSNBC SUSPENDS SHUSTER

MSNBC has indefinitely suspended anchor David Shuster after it found out that he participated in a test of a new show at CNN.

Shuster’s contract with MSNBC is up at yearend.

He anchors MSNBC for two hours a day at 10 a.m. and 3 p.m. and is being replaced by Contessa Brewer in the morning and Ed Schultz in the afternoon.

Shuster also has appeared as a substitute host on “Countdown with Keith Olbermann,” the network’s highest-rated program.

He was at Fox News before MSBNC.

CNN has not yet okayed the new program.

AP ROLLS INVESTIGATIVE UNITS

The Associated Press has established four regional investigative units because such journalism is more vital than ever, according to a memo from the wire service.

The teams will include reporters plus research specialists and Internet-savvy pros. They will "work closely with our video producers to make sure our exclusive journalism is designed from the beginning to work on all platforms."

The I-teams will produce “big picture, hard-edge enterprise, often with a strong database component that will allow for easy localization.”

They are to be up and running in a couple of weeks. AP is creating the teams because "in today's world of tweets and sound bites, it's easy to lose sight of journalism's essential role in holding governments and institutions accountable."

GARFIELD EXITS AD AGE

Bob Garfield has given up his “Ad Review” column in Advertising Age after a 25-year run.

The 54-year-old counts “naked greed” among reasons why he called it quits. “From this point forward, my brain is for rent,” he wrote in his final column. “I will be forming partnerships with three or four organizations for the purpose of selling to marketers what I've been dispensing gratis for decades. This possibly will bring me money, which is good for buying things.”

Garfield is frustrated that his AA forum seemed to have had little impact on the crafting of advertising.

There is also a perception that “a generation of practitioners who may believe the industry has passed me by.”

NBCU LURES FOX'S STERNBERG

NBC Universal has recruited David Sternberg to head its Universal Sports cable channel. Universal Sports is the renamed World Champion Sports Network that NBCU and Intermedia Partners acquired in 2008.

The channel is in 57M homes, far below the level of four of ESPN's six channels. Leader ESPN is the leader with distribution in 99M homes. ESPN Classic is just below Universal Sports with 56.7M homes.

Variety reports Sternberg will be selling “niche” Olympic-type sports like track and field, karate and volleyball. Universal Sports has partnerships with the international federations covering rowing, swimming and gymnastics.

ELLE'S SMITH TO BON APPETIT

Carol Smith, chief brand officer at Elle, is joining Conde Nast's Bon Appetit and Gourmet's website, cookbooks and TV programming ventures as VP of the newly created epicurean group.

Smith is responsible for extending the Elle brand into TV shows such as “Project Runway” “Stylista” and “The City.”

Paul Jowdy, publisher of Bon Appetit, shifts to executive director-sales. He reports to Smith.

BAILOUT COMPANIES TAKE REP HIT -- HARRIS

Corporate America’s reputation bounced back slightly last year, based on Harris Interactive’s measurement of the 60 most visible companies in the U.S., as public perception began to focus again on performance and governance over value and comfort. Companies that received bailout funds were battered, though, with Freddie Mac earning the lowest score in the reputation index since Enron.

The percentage of Americans who said corporate reputation is “not good” or “terrible” fell from 88% in 2008 to 81% last year, Harris found. Those who said the reputation of companies is “good” rose from 12 to 18% from ’08-09.

Individually, Ford Motor Co. enjoyed a robust rise in reputation as it gained 11 slots in the Harris Interactive RQ Study index, despite general malaise in the auto sector. Six companies scored in the “excellent” range (more than 80 in the index) topped by Berkshire Hathaway, which ousted Johnson & Johnson atop the ranking by fewer than 0.5 points. Following BH and J&J, are Google, 3M, top-60 newcomer SC Johnson and Intel.

Robert Fronk, senior VP at Harris Interactive, called the finding a “slightly more positive reputation environment.”

The Harris RQ survey includes more than 29,000 Americans polled from Dec. 29, 2009 to Feb. 15, 2010.

Toyota Motor Corp. tumbled 10 slots from No. 10 in 2008 to No. 20 last year. The biggest declines were registered by Bank of America, AIG, Verizon Communications, JPMorganChase and Citigroup, which all fell more than four points in the index.

Ford’s aversion to government aide likely helped its boost, the largest score increase in the index in nine years. Companies that received bailout money from the government -- not surprisingly -- took a reputation beating, according to the survey, as nine of the lowest 10 ranked firms were bailed out by Uncle Sam.

AIG was supplanted in the bottom slot (it moved up one position) by a newcomer to the list, Freddie Mac. FM scored the lowest ranking – 38.94 – since Enron’s 30.05 in 2005.

Notably, Freddie Mac, AIG and Fannie Mae received scores below 50 in the index, which, Harris Interactive, notes, has been a strong indicator of a lack of future viability for a company.

Goldman Sachs, which also joined the list this year, scored a 51.36.

(Media news continued on next page)

COURT LEAVES NET NEUTRALITY UNCERTAIN

A federal appeals court on Tuesday ruled that the FCC does not have the authority to penalize telecom companies for blocking or limiting information on their networks.

The decision is a deathblow to a series of years-long attempts by the commission, Internet content providers and activist groups to instill a legal precedent that would treat all data on the Internet equally, a notion that has bloomed into a cause célèbre otherwise known as Net Neutrality.

“I think the instant reaction is that it’s a setback,” said Chris Riley, Policy Manager for the Free Press. “It definitely raised the alarm levels for supporters of the public interest.”

The case stems from a 2007 incident in which Comcast allegedly resorted to “packet-forging,” or using data encryption to deliberately slow customer access to the file-swapping network BitTorrent.

After investigating user complaints, the FCC sanctioned the telecom company and warned them to stop limiting user access to content.

Comcast challenged the decision, stating their actions were necessary, as sites like BitTorrent take up abnormally large amounts of bandwidth and thus pose a burden on their network.

Last week’s unanimous D.C. Circuit Court decision ruled the FCC’s reprimand of Comcast exceeded its authority, as the commission does not currently have the power to regulate network management to the same degree that it regulates services for devices like telephones.

As such, regulatory actions not directly coupled to “old” telecommunications devices fall outside its jurisdiction.

A Step Back for Neutrality

With no laws currently in place to prohibit telecom companies from blocking or limiting access to information, critics have said the Comcast incident highlights a need to implement legislation that supports Net Neutrality, which in its broadest sense, is the idea that all content on the Internet should be available for equal access.

Consumer rights groups, along with a band of support from content providers, software companies and nonprofits, have asked for new federal regulations that would keep telecom companies from becoming Internet “gatekeepers.”

Hypothetically, broadband providers could slow down or even deny access to websites in favor of sites with whom they have financial or political affiliation.

Riley said Comcast’s recent proposed merger with NBC Universal could brew one such perfect storm.

“Not only does the Comcast example show they have the tools to block and control content, but we’ve also seen their incentives to do it as well,” he said. “If this merger is successful, it’s really easy to envision a scenario in which a network gives preference to what information is shown.

“This could effectively turn the internet into a glorified version of cable television,” Riley added.

DJ KICKS OFF ‘PRO’ EDITION OF WSJ

The Wall Street Journal Professional Edition, a combination of WSJ coverage and Dow Jones content, launched last week to consumers at wsj.com/pro to provide news and information across industries and topics.

Through the DJ Factiva service, users can search the company’s content, along with 17K other sources, of which, the company notes, many are not available on the “free Web.”

The Pro edition can also be customized by industry like healthcare, energy or media.

DJ president Todd Larsen noted the new service leverages two of the company’s leading products.

The premium service is available for $49 per month and existing WSJ.com subscribers can upgrade at a discounted rate.

ONLINE ADS SET Q4 RECORD

U.S. online advertising spending hit a record $6.3B during the fourth quarter of `09, up 2.6 percent from the year earlier period, according to a report from PricewaterhouseCoopers and the Interactive Advertising Bureau.

David Silverman, partner at PwC, believes the robust fourth quarter is an indication that the “worst of the economic impact on internet advertising is over and that the seeds of growth have been planted.”

Spending picked up beginning in the second-half of the year, though not enough to show an overall gain for `09. Full-year ad spending dipped 3.4 percent to $22.7B.

That marked the first yearly overall drop since the dot-com bubble burst in `02.
Most online spending was geared to search. Search accounted for 47 percent of spending. Outlays grew one percent to $10.7B.

Display ads advanced four percent to $8B, while online video soared 38 percent to $1B.

The classified, lead generation and e-mail categories posted declines for the year.

GANNET DIGITAL CHIEF TO EXIT

Gannett's chief digital officer, Chris Saridakis, will exit the company at the end of April, according to an SEC filing by the company.

A member of Gannett's management committee and a senior VP, he joined Gannett in 2005 when it acquired PointRoll, a media company where he served as COO and later CEO.

He’s leaving to pursue “other interests,” the company said.

Ranking of PR Units of Ad Agencies

Click here for ranking.

RUBEL ACQUIRES AFFILIATE

Furia Rubel Communications has acquired an affiliate, HG Marketing Group, in a combination of Doylestown, Pa.-based firms.

FRC is led by Gina Rubel, an attorney who handles PR and marketing with a specialty in the legal sector. Laura Powers, who founded HG and has held posts at Verizon, Comcast and Merrill Lynch, takes the title of VP of marketing.

Rubel said Powers and she had discussed a merger for years.

WHITE LEADS HEALTHSTAR

Erinn White, a veteran of New York’s HealthSTAR PR, has been named president and CEO of the independent PR firm following the departure of its founder last month.

White, a Ketchum alum, joined HealthSTAR as its second employee in 2003 and had recently been executive VP and general manager.

The healthcare specialty firm, part of the New Jersey-based marketing services company HealthSTAR Communications, works with clients like Teva Pharmaceuticals, Bayer Consumer Care and Abbott, among others.

“Her years of dedicated work and experience in health communications make her a natural fit,” said Bob Muratore, president of HealthSTAR Communications’ strategic communications unit.

HealthSTAR PR recently moved into a 7,500-square-foot space on Madison Avenue in New York.

Helene Ellison, who founded HealthSTAR, returned to Burson-Marsteller in March following the exit of that firm’s healthcare chief to WeissComm Partners.

FOREIGN COMPANIES NEED U.S. PR

An increasing number of companies based in Europe, the Middle East and other parts of the globe are seeking to do business in the U.S. because it remains the biggest market in the world, says Gerald Schwartz, president, G. S. Schwartz & Co., New York.

The wealth and size of the U.S. market, coupled with the cheap U.S. dollar, are behind the flood of companies seeking to do business here and which need U.S. PR and marketing counsel, he said.

Although China has grown tremendously lately, surpassing Germany, the U.S. remains the No. 1 market for both business-to-business and consumer products and services, he said. Other countries have become leaders in certain sectors but the size of the countries blocks exponential growth, he feels.

Israel is noted for its technological prowess but the country only has 7.5 million people while New York City alone has 8.3 million, he noted. This is true for many small and medium-sized countries in Europe and the Middle East—marketing in the U.S. is necessary if they are to expand, he said.

New York remains the world’s media, financial and PR center, he says.

“It’s a good time and place to be. Our New York firm only has one office and yet we have clients in China, Hong Kong, England, Ireland, Holland, Israel, Moscow, the Caribbean and Argentina,” he said.

SYNAPTIC DIGITAL MAKES DEBUT

Synaptic Digital, echoing the basic unit of communication in the brain, has been picked as the new name for the combined firms of NewsMarket and Medialink.

“Synapses help you to think and make you smart,” said Jim Lonergan, president and CEO of the combined company. “At Synaptic Digital, we help clients to communicate smarter and build connections with people that matter most across various mediums and platforms."

NewsMarket, founded in 2000, distributes digital video to more than 25,000 media outlets in 190 countries.

The outlets can access, preview and order free broadcast-quality video and other multimedia content for their programs.

Medialink, which handled satellite media tours and created and distributed video news releases, among other services, was acquired by NewsMarket in July 2009.

Lonergan said the combined companies offer “a broader solution” to those seeking to communicate via video.

Additional alliances in the world of video production and distribution are planned, said Lonergan.

The combination of NewsMarket and Medialink provides clients with proprietary services, creative tools and global distribution to TV, internet, social media, radio and mobile outlets, he said.

The company’s flagship distribution platform is thenewsmarket.com.

VOCUS BUILDS A NEW HOME

PR software developer Vocus has inked a 12-year lease for a new headquarters in Beltsville, Md., a 93,000-square-foot space that the company said nearly doubles its existing operations in Lanham.

The company, known to offer perks like a basketball court and ping pong tables, said the new operation will incorporate a “new urbanization” concept which uses modern architecture to resemble a “small town experience.” In addition to work space, exercise and other amenities will be featured for staffers who can “recharge” without leaving the building.

Kwasi Holman, president and CEO of Prince George’s County Economic Development Corp., said the county partnered with the state of Maryland to provide an “attractive incentive package” for Vocus to stay in the area. Vocus also has offices in College Park, Md., Herndon, Va., and Ferndale, Wash., as well as London.

The building is being developed by First Potomac Realty with architecture handled by D.C.’s OTJ. Move-in date is slated for Q1 of next year.

UPCOMING: May 6 -- PRSA/Georgia Chapter Annual Conference, The Loudermilk Center, Atlanta. Opening session – "Welcome to the Personal Brand Era” – will be lead by Ed Schipul, CEO and president of Houston-based The Web Marketing Company while the keynote luncheon speaker will be Francie Schulwolf, vice president of corporate communications, Americas, for InterContinental Hotels Group who will present on "The Holiday Inn Journey – The Rebirth of an Iconic Brand." Info: prsageorgia.org.

TYLER EXORCIATES (Continued from pg. 1)

“Why does national seem to have a policy of avoiding the media at all costs?” he asks.

Tyler, who served as an Assembly delegate for ten years and was named as L.A. “Distinguished Professional” in 1987, rapped the “ongoing vendetta against the O’Dwyer NL and Jack O’Dwyer personally.”

PR professionals "should never counsel a client to retaliate against the media for some slight or criticism," he added.

Tyler, a member of the L.A. chapter since 1974, was city chair of the national conference in L.A. in 1987. He has belonged to the Society of Professional Journalists, national and local chapters, for many years.

He had PR posts at Ford Motor Co. and American Airlines and worked for Carl Byoir & Assocs. and N.W. Ayer. Clients he served included AT&T, Sheraton Hotels, Hallmark, DeBeers Diamonds, the government of The Bahamas, Honeywell, Kodak and RCA. He was also national PR director for Six Flags Corp.

While working in PR he taught the advanced PR course at California State University/Northridge which serves more than 30,000 students. He was the PRSSA chapter adviser and spoke on PR at a PRSSA national conference.

Tyler's Letter is as follows:

I have become increasingly uncomfortable with what is happening to PRSA nationally.

I was very active in PRSA because I felt that the local chapters were designed to work with and for both young and experienced PR professionals, and that the national organization was there to support the chapters and their programs.

Sadly, I don't feel that is any longer the case. I think national has taken on its own agenda and has veered off course, making decisions without direct input from the members--decisions that boost national's reputation--possibly--but do little for the benefit of the chapters. For example, the unilateral decision to kill the printed directory was, in my estimation, a major mistake. Everyone I knew used the printed directory in their businesses, whether that be keeping in touch with individual members or selecting an agency in another city with which to partner on one project or another.

The on-line directory just doesn't work the way the other did. Members had no say in this decision.

Actual decision making by national conference delegates seems to be limited and chaotic. Pertinent information on important topics to be voted upon seems either sparse or nonexistent. Information on costs or budgets often is offered extremely late or not at all.

Salary information for key staff members appears to be kept from members, as are names of delegates who will be voting on such matters. Huge headquarters costs are now the rule. (Why was New York bypassed twice for Philadelphia as the national conference site when staff costs for travel, hotel, meals, etc., could have been avoided?)

Headquarters personnel with actual PR experience are a very small part of the national staff.

Why is the PRSA ethics policy so weak? Why does national seem to have a policy of avoiding the media at all costs. Why aren't national officers and staff members appearing before chapters on a regular basis? And, on a very specific case, why does it appear that there is an ongoing vendetta against O'Dwyer's Newsletter and Jack O'Dwyer personally?

Is it because he criticizes PRSA and some of its policies? As PR professionals, we would NEVER counsel a client to retaliate against the media for some slight or criticism. (Remember when the White House cancelled some newspaper subscriptions because the president or his staff felt the papers had been too critical? That backfired then and probably always will.)

PRSA was WRONG when it sold material from O'Dwyer and other sources. We should have just admitted it and worked for some equitable solution for all parties.

PRSA is WRONG when we say that O'Dwyer ads are not acceptable and its staffers are not eligible for membership.

Let's get back on track and move PRSA back into the right direction. If staff leaders want to rebut any of these points, let them do it in the columns of O'Dwyer's Newsletter or other PR publications.

I certainly don't expect—or want—a personal reaction to any of this.

ROLE FOR DIRECTORS GROWS--NADLER

Pressure is increasing on directors to be more independent of management, David Nadler, vice chairman of Marsh & McClennan Co., told 165 executives yesterday at the Spring Seminar of the Arthur W. Page Society in the Waldorf-Astoria, New York.

Directors are also in need of more information from the companies they serve and it should be in usable form, said Nadler. He has an MA and PhD in psychology from the University of Michigan and an MBA from Harvard University.

MMC, with $10.5 billion in revenues is in insurance services and non-insurance consulting. Nadler also consults on corporate governance and organizational change through MMC’s management consulting company.

“Boards want the whole story” and some are even interfacing with employees themselves to get it, said Nadler. Social media is one of the ways they are tracking employee opinions, he noted.

Questions were posed to Nadler by Gary F. Grates, president and global managing director, Edelman Change.

In response to a question from the audience, Nadler said he sees no noticeable demand for communications executives on boards. More likely prospects, he said, are human resources people because they would have input on compensation issues.

Also in demand, he said, are executives who have relationships with important constituencies of the company and executives who have knowledge of the industry involved.

Three Big Changes

Nadler said the SEC and NYSE are forcing major changes in the way boards operate.

The power to appoint directors has now been shifted to a governance committee and away from the CEO.

The CEO and chair titles are being split and if a CEO insists on being chair, a “Lead Independent Director” will be elected who performs many of the duties of the chair.

SEC and NYSE rules say that the board must meet “periodically” without any members of management present.

Nadler said that in practice most boards are having such executive sessions at almost every board meeting.

CEOs did most of the appointing of directors in the 1990s but they have now realized that they “work for the board,” he added.

Pressures currently are so great on directors that finding them is getting harder and harder, he said.

Whereas some executives used to serve on three or four boards, the rule now is for an executive to serve only on one board.

Most sought after directors are CEOs of companies or CEOs who have recently retired.

Ideal size of a board is no more than 10-12, said Nadler, who answered several press questions following the meeting.

Larger boards result in directors addressing “an audience” rather than “having a conversation,” he said.

Lots of work is done in executive committees that have 6-8 members, he added.

Many of the country’s problems can be laid to ill-informed and weak boards of directors.

Even “alpha males and queen bees with strong opinions turn into meek conformists” in a boardroom says the New Yorker’s James Surowiecki.

Board expert Nell Minow says otherwise decent people lose “half their I.Q.’s and all their guts” on a board.

Enron and Tyco are examples of boards sitting silent while far-reaching abuses took place. The same could be said of AIG, Citigroup, Fannie Mae, Freddie Mac and the host of local banks and institutions that helped cause the current two-year economic downturn.

So we were happy to hear management expert David Nadler of Marsh & McClennan Co. tell the Arthur W. Page Society last week that the SEC and NYSE are trying to force boards to become more active.

Both had pushed independent directors on boards in the 1990s but that didn’t stop the Enron, Tyco and the other scandals. Enron’s board was mostly blue-chip outside directors. CEOs are finding out that they report to the board rather than vice versa, said Nadler.

Financier Carl Icahn and others have been campaigning for years against CEOs also being chairs of their own boards.

This in effect puts the fox in charge of the chicken coop—the CEO being his own employer.

SEC and NYSE rules now say that if one person holds both titles, a “Lead Independent Director” must be named who will conduct at least one part of a board meeting without the CEO/chair or anyone from management being present.

Appointment of directors, traditionally done by the CEO, is now in the hands of a governance committee.

Boards Want Information

Nadler said there is also a trend for directors to become more informed about the industry involved.

Instead of serving on three or four boards, directors now typically just serve on one, he said.

The role of PR pros, he added, is to provide directors with information in usable form, i.e., not swamp them.

Some directors are even pursuing information on their own, monitoring employee and other blogs, he noted.

Get Thee to a Bar

Directors should leave what Surowiecki calls the “echo chamber of their own opinions” and hotfoot it to a bar where industry or beat reporters hang out.

We doubt employees are going to level with a director, especially since many of the directors are CEOs or ex-CEOs (Nadler’s recommendation for directors).

Reporters serve as the buffer between employees and their bosses. Directors cannot rely on the PR staff to “sock it to them.” PR pros would be over-stepping their roles.

The May Vanity Fair says that “Team Tiger,” the large group of people surrounding him, knew plenty and so did some reporters. We believe that key people at sponsors of Tiger such as Nike, Accenture and AT&T also knew but kept it to themselves (“hold your nose PR”).

Board members should win the right to circulate freely with reporters, trading information and insights. It’s a delicate situation but a win for both sides.

This sounds difficult in the current hysterical atmosphere surrounding press relations. But boards, management and even PR pros are going to remain in the dark about some key things unless they doff their stiff shirts and mingle with the masses and their press representatives.

SPJ Is like PRSA

Propelled by the March/April “Ethics” issue of Quill, the magazine of the Society of Professional Journalists, we are trying to get the SPJ board to look into the unethical boycott against us by the PR Society.

So far, SPJ has a perfect record of failing to help us on any issue.

Gary McCormick, of HGTV Scripps Networks, and Bill Murray COO of PRSA, came to our office March 19 to state numerous times that we had committed unforgiveable offenses and would not be dealt with in any way by the Society. Scripps has an elaborate 21-page ethics code and Scripps is highly active in SPJ.

When SPJ executive director Terry Harper died June 2, 2009, a weekend remembrance was conducted June 6-7 in Indianapolis and rural Eminence, Ind.

The SPJ staff, “in between, conducted a Scripps leader retreat for almost 50 journalists.” SPJ president Dave Aeikens spoke to the “Scripps” attendees and there was duckpin bowling as part of the “Scripps weekend,” said the SPJ website.

PRSA has been ducking us for many years so what Murray and McCormick said wasn’t exactly news. What was new was the ferocity of their resolve.

Our worst offense, they said, was contacting the chancellor of the University of Nebraska after Prof. Gail Baker of that school refused to talk to us. She had just been named Ethics Board chair.

We e-mailed Chancellor John Christensen four pages of details on the Society’s practice of copying and selling authors’ articles without their permission. Within four hours Baker had quit as EB head. PRS has never challenged a word of this article.

That was “stepping far beyond the bounds of accurate and professional reporting,” said a full page attack on us in the April 2008 (“Ethics”) issue of Tactics.

We had shown a copy of this attack to McCormick and Murray when they were in our office. When we pressed for the “smoking gun” against us, Murray pointed to that attack.

What Is SPJ’s Opinion?

The Ethics issue of Quill is loaded with all sorts of commitments to high ethics including an article by Kelly McBride, ethics group leader for the Poynter Institute, St. Petersburg, Fla.

We talked to McBride by phone and sent her as well as Quill editor Scott Leadingham and the 19-members of the board of SPJ materials on the PRS boycott. We want to know whether calling and e-mailing the chancellor of U of N about Baker and PRSA was an ethical violation.

We also want to know if McBride and SPJ leaders have anything to say about the boycott against us led by an employee of Scripps.

President of SPJ is Kevin Smith, assistant professor of journalism, Fairmont State University, Fairmont, West Va.

Executive director is Joe Skeel, who has been with SPJ since 2004. He was with The Republic 20,500 circ. newspaper in Columbus, Ind., from 2000-04 and other newspaper jobs after graduating in 1997 from Ball State University. From 2002-04 he was “presentation editor” (design) of The Republic. There is no director from New York city. Closest is Luther Turmelle of the New Haven Register. The other 17 are spread throughout the U.S.

--Jack O'Dwyer