What ethical obligations do PR firms owe consumers?

February 13, 2023

Since FTX’s collapse, millions of words have been written and spoken about business practices, financial regulations, corporate responsibility, and prison time. Everyone and everything connected to FTX is being dragged down with founder and former CEO Sam Bankman-Fried.

The media hasn’t escaped scrutiny and criticism. The industry has been accused of failing to provide proper examination of FTX’s practices while giving both the company and SBF enviable coverage for years. Favorable stories ranging from SBF’s political views to his alleged business acumen and even his age – he’s just 30 years old – were all the rage.

But the media’s narrative-driving coverage doesn’t stand alone. SBF and FTX hired multiple public relations firms which undoubtedly drove significant coverage. And while PR firms can’t be expected to thoroughly audit every prospect, there are still lessons we can take from FTX’s collapse to act ethically, protect our reputations, and work with the best clients.

Always remember the clients’ end customer

FTX’s investors lost their shirts, as did the crypto industry generally. Somebody loses money every time a company, industry, or wider economy take a downturn. Those losses are often the known risks of investing…but not always, such as when average Americans lost money in the 2008 recession due to unethical corporate practices which were backed by bad government policy.

PR firms can provide a professional barrier between themselves and risky clients by always keeping the end consumer in mind. Does it seem like this product, service, or process will benefit the end consumer? A yellow flag should be raised if the answer seems like “no” or “this is too good to be true.”

Watch for competence and integrity

Business failure can happen for many reasons. Again, PR firms can’t audit everyone, and even major scams like Elizabeth Holmes’ often sneak through proper safeguards. But when a prospect can’t seem to get its act together, it raises the question of whether the prospect simply needs time and a little helping hand – or if the organization doesn’t care about best practices, integrity, and ethics.

Ethics aren’t always about the ever-changing personal values about which people often disagree. They are mostly related to universal values like paying staff well, admitting and correcting mistakes, and not shafting customers. Yellow flags in this area are not just good for avoiding bad publicity; they also help firms avoid getting shafted.

Does the prospect (or client) fail the firm’s ethics/beliefs test?

This is the side of ethics and morality that has driven the business world bonkers for a decade. What personal values are held by the company owner and/or company employees that would make a prospect untenable?

For example, a pro-life PR pro wouldn’t take on Planned Parenthood as a client. But is a client who supports legalized abortion when the mother is raped and when the mother’s life is at risk also unacceptable?

Similarly, a firm owner who supports Black Lives Matter isn’t likely to accept a conservative legal or gun group as a client. But what about someone like Senator Tim Scott (R-SC)? He says he’s been treated poorly by law enforcement because of his race. He also believes that America isn’t racist, and that police are valuable to society’s well-being.

Only the company can draw its own lines – which ones can’t be crossed, and which ones can be crossed for the right sum of money?

Look for flags early and often

The easiest way to avoid being attached to disastrous companies is to weed them out ahead of time. Unfortunately, there’s no rule book for that, so PR professionals need to:

  • Remember the end consumer.
  • Watch for competence and integrity (or lack thereof).
  • Determine how the prospect aligns with the company’s basic beliefs/ethics.

A version of this piece was originally published by Dustin Siggins at PR News Online.

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