FINANCIAL REFORM: A Major Opportunity for Public/Investor Relations

Financial reform has arrived, even though its specifics are still being hammered out by regulators. But we do know, right now, this for sure. The new act will confront all businesses — not just financial firms — with a set of communications challenges unparalleled since Sarbanes-Oxley. That means public and investor relations are poised for a boom in the executive suite.

Financial reform boils down to one big thing for business leaders: greater transparency.

Henceforth, companies must publicly disclose in-depth information about executive pay, lending practices, fees and business operations. Financial firms will be monitored by two new government agencies, each with the responsibility to report their findings to the public. Employees themselves will be empowered as public whistleblowers with the promise of significant cash bounties.

This fishbowl environment could dramatically increase a company’s vulnerability to competitors and consumer activists. Or it could usher in a period of heightened compliance, social responsibility and ethical leadership on the part of American business.

At the core of each is a public relations and investor relations issue. And professionals in this space have a lot of work ahead of them to communicate whether financial reform truly ameliorates our business culture and enhances our economic stability, as well as articulate and demonstrate how their companies and clients are taking leadership in this new era. For those of us in the communications business, that’s the good news.

Technorati Tags: financial crisis, Financial reform, Wall Street, public relations, business, Makovsky