This statement by on of the leading economists of our time should have started bells ringing all round the PR industry half a decade ago.
Public relations, a practice claiming to affect publics (marcoms, internal PR etc.), a conscience between the organisation and its publics (CSR, Community PR etc.) an arbiter between the organisation and its sponsors (financial PR, Lobbying etc.), is about working with the social animal - mankind.
If John Kaye is right, and I believe he is, the logic of his statement is that the role of public relations is to work with and through society to make people economically successful.
This means we need to be successful in creating, sustaining and optimising value. This is as true of efforts to make companies big and profitable, protect the environment or bring relief to the dispossessed. Public relations is active in all these areas and many more. But let us concentrate on the PR role in the measurement, evaluation, auditing, value, management and development of tangible and intangible assets. It lies at the heart of our practice if we so choose.
Thus the PR practitioner can choose to be at the heart of wealth creation or can serve up hot dogs to its followers.
In November, Directors of companies (including, of course, PR directors) of all 1300 companies quoted on the London Stock Exchange will be told that they could be at risk of unlimited fines from new UK Government requirements to extend the scope of company reporting. The London Stock Exchange (LSE) is the global capital market of choice for over 500 international listed companies from over 60 countries. This means that being involved in financial reporting is an issue for PR especially those in in the corporate communications domain of public relations practice worldwide. The big issue is the, now mandatory, requirement for Annual Report 'Non Financial Reporting'. In 2003 I wrote a paper for XPRL to help explain why and how Non Financial Reporting is an issue for PR practitioners.
The UK law (which applies to all quoted companies on the LSE) now expects companies to report on relations with a range of named stakeholder and other 'users' of annual reports. Basically, the way the law is written, any social group with a copy of the Annual Report can be described as a 'user' and thereby a stakeholder for whom companies have to submit a report on its relationships.
As Stakeholder Theory, as it is presently regarded is flawed. This means that the whole process of implementing the law will be fraught with difficulty (not to mention silly, distracting and expensive legal wrangles).
However, there is another way. If PR practice regards its work as “influencing behaviour to achieve objectives through the effective management of relationships and communications” and accepts that is is not just rhetoric but is grounded in theory, then we can resolve the issues that face the 1300 practitioners who have to bear responsibility for the impact of Non Financial Reporting.