The cost of disconnected boards in the media age: a public relations executive argues that a missing ingredient for many boards today is a seasoned communications person who can assess potential crises and form appropriate responses.

• Author: Keating, Rick
• Position: From where I sit

In a 2005 McKinsey & Co. survey of board members of public companies, the authors reported that directors are "eager to shake off the perception that they are defensive and lethargic," particularly in the wake of management scandals, poor stock performance, lackluster sales and underwhelming revenue growth. The authors also reported that issues of concern for board members were expanding so much that they were no longer focused predominantly on short-term financial performance, but also on the long-term health of the company, its overall strategy and leadership.

In fact, according to the survey, 70 percent of board members want to know more about an institution's customers, their likes and dislikes, brand strength and customer satisfaction. This compares to 31 percent who prioritized financials and 28 percent who prioritized operational performance.

The days of only homing in on internal issues and successfully riding out storms by utilizing a fortress-mentality are over. However, it is a combination of focus on both internal and external issues that is of most importance to directors. As such, boards need a viewpoint and expertise that is critical in today's media-saturated age--the communications professional.

Strategic--and Competitive

Given what many corporations and institutions face today, naming executives to boards who are skilled in public and media relations--as well as broad strategic communications--is not only a strategic measure, but also a competitive move. A survey released by public relations firm Weber Shandwick this summer reported that nearly 9 out of 10 of the world's largest companies lacked communications experts on independent boards. But, those that did delivered 6.6 percent per year above stock market averages.

Coincidence? As a trustee and board member at a number of institutions, I think not. It is clear that the corporation astute enough to realize the need for and value of having a communications voice on the board is ahead of the curve. Such boards are well-positioned internally to effectively address and reconcile a myriad of issues that can easily grow out of control and spill over into financial performance and the very health of the company.

The "public" has become far more than a consumer: It is also investor, investigator, activist, analyst and critic or proponent. Aiding these processes is a continually expanding number of "media" sources, primarily on the Internet, that enable or advocate the public's...