To Westminster for the CIPR’s annual Maggie Nally lecture, delivered yesterday by Ketchum CEO Rob Flaherty. Titled ‘The End of Illusion’, Flaherty’s intelligent speech revolved around the familiar idea that “the current confluence of new social technologies, globalization, changing expectations and extreme transparency has led to a shift in power from institutions to individuals that virtually eliminates the ability to sustain an illusion.” As a broad trend, it’s difficult to argue with that claim, particularly when one considers some of the examples Flaherty cited. Sina Weibo, for example, helped to debunk the official explanation of China’s high-speed train crash in 2011. More recently, the unrest in Ukraine has been played out on social media. And, of course, there are numerous examples from the business world that Flaherty has particular insight into:
We could probably spend the whole night sharing examples of business leaders who profess one value, and then who act in a directly contradictory manner. They say: “Proudly Made in our Country,” and outsource their jobs to India. They donate to children’s charities in one market and employ child labourers in another.  They claim staff are their greatest asset then downside by half. They claim environmental responsibility as a fundamental value, and blithely pollute in pursuit of profits.  The thing is, not only do they get caught today. But their disillusioned consumers punish them where it hurts. Sales. Our research found that overwhelmingly, consumers who are unhappy with an organizations’ leadership will buy less from that organization or will boycott it all together. There is a concrete, bottom line consequence from saying one thing and doing another.
PR people, added Flaherty, must embrace this change. “It comes back to us, then, the public relations professionals, to push our leaders to live in the real world,” he said. “In my view good communication teams must now exist to change the way companies operate — not just communicate.” While the demand for greater transparency is certainly gathering steam, some glaring exceptions persist. This much is elegantly brought home in an investigation by Nation reporter Lee Fang, which revealed that lobbying money is increasingly moving ‘underground’, avoiding the regulations that are designed to make corporate influence of legislative policy more transparent. On paper, Fang notes, the US lobbying industry is “quickly disappearing”. This, though, appears to be the kind of illusion that Flaherty might appreciate, because corporate spending on policy advocacy is hardly drying up. Instead, it has simply become harder to track, because of the ability to evade the relevant regulations.
A loophole-ridden law, poor enforcement, the development of increasingly sophisticated strategies that enlist third-party validators and create faux-grassroots campaigns, along with an Obama administration executive order that gave many in the profession a disincentive to register—all of these forces have combined to produce a near-total collapse of the system that was designed to keep tabs on federal lobbying.
By any measure, this probably counts as the opposite of transparency. Neither is this issue limited to the US alone. While some countries do enforce stringent lobbying regulations, many do not. The UK recently passed a law that, according to the PRCA, will only cover 20% of the nation’s lobbyists. The idea that corporations (or unions, or anyone) can spend money to advance their interests is not up for debate. At the very least, though, the demand for a clear accounting of this influence does not strike me as an unreasonable one. Otherwise, it is the illusion of democracy which is at risk. Or maybe, as Flaherty himself noted last night — pointing to low voter turnout to make his point — it already is. Photo credit: