Harvard Business Publishing

One only has to look at the growth of reputation management and media training divisions in public relations companies, which were once content to offer basic PR, to see that business is slowly becoming aware of the power of today's voracious 24 hour media. Ms Corkindale is right to say that Mervyn King handled the media badly. Sadly this is typical of many executives in business. Many still think that the media can be fobbed off with disingenuous statements issued by their public relations teams. But King is not running a 'normal' business. Like other public institutions, such as the police and the military, its raison d'etre is service. The Bank of England depends on reputation more than, for example, a supermarket chain. A supermarket chain might be damaged by stories that it sold sub-standard meat but public memory is short in such cases. A shopper will soon return to the store if it offers competitively priced products. For public bodies, which do not exist to make a profit, adverse publicity is more serious. The Metropolitan Police in London is still seen by many as 'institutionally racist' - almost certainly unfairly - many years after it failed to identify the murder of a black teenager in south London as racist. I would be interested to hear from executives in business. Does an energy company which operates around the world care more about its image than a manufacturer based in one country? How do companies that depend on image as much as the quality of goods view the media? Does a company care if the media reveals that it uses child labour in the Far East earning a few pennies a day to make sports shoes that cost hundreds of dollars in the shops in Europe and North America?

Having advised many companies in the United Kingdom on media relations I wish to sound a note of caution. Many senior executives regard the press and broadcasters as a necessary nuisance. They know good news, when a company makes handsome profits, treats staff well and provides value to customers, does not interest the media. Only when a company is in trouble will it be in the headlines. Senior executives hope their press officers will anticipate problems and prevent them becoming full blown crises but they understand this is not always possible. In those instances the company's press people are meant to dampen the flames of controversy. We should also realise many companies do not care that much about what is written or broadcast about them. A CEO once told me he only worried about analysts and major shareholders, not journalists. He lived to regret that arrogant simplicity when his company was torn apart by a newspaper and its share price crashed. This was a rare example of a company being damaged substantially by press coverage. British Airways is regularly attacked by the press but it remains one of the world's most popular airlines. Just as executives should not dismiss the media as irrelevant so it is simplistic to say companies must always devise strategies to please journalists.

Business co-exists happily with the Wall Street Journal, the Financial Times and the business pages of the serious newspapers, the business weeklies, such as the Economist, and television and radio shows and Web sites devoted to business. Businesses are often criticised here but audiences are well informed and pro-business. The problem comes when a company finds itself in the stormy waters of the general media. Here reporters want dramatic stories, where business is usually the villain. Some companies, such as BA, mentioned by a previous reader, are so high profile they are often general news. As are companies in always controversial industries, like oil, pharmaceuticals, tobacco and arms. Public bodies like the Bank of England must also expect to be battered by the media. It comes with the turf and Mervyn King should have known that. His duty was to defend the bank's key asset, its reputation. And he failed to do that.

This article by Professor Roy Greenslade, a respected commentator on the media for the London Guardian, illustrates the complex relationship between companies, analysts and the press. I do not agree with the professor's wry conclusion but the article is useful as it shows how analysts and media feed off each other. Companies must try to counter this. This is not easy as we see here, where the companies are themselves in the business of media.

Are we being a little optimistic here? Surely business only cares about its image if it affects profits? Businesses trading with and operating in Burma do not plan to sever relations with the military junta, despite the junta's appalling human rights record, culminating in this week's murder of unarmed demonstrators.

I do not know enough about banking to comment sensibly on whether Mr King made a mess of Northern Rock. Undeniably he forgot the press in the United Kingdom is the most aggressive and competitive - whilst also being amongst the most sophisticated - in the world. UK reporters will always try to find a guilty person or defective part to explain a crisis or accident. By his hestitancy and contradictory statements Mr King gave them what they wanted: a guilty person. The media dislikes subtleties. It wants simple explanations, preferably in the form of an important person such as Mr King, so that it can accuse that person of negligence or incompetence. This makes for attention grabbing headlines. Senior business leaders in the UK must be firm and decisive. They should always aim to tell the whole truth. If they cannot do so for whatever reason they must not lie as lies are usually uncovered. They must remember the media habitually seeks black and white explanations for complex events. They should ensure they are not blamed for what has gone wrong.

Mervyn King was served badly by the Bank of England's department responsible for press relations. But they only talk to financial reporters about the arcane operations of the money markets and cannot be blamed. The government has no excuse for failing to protect Mr King. The new British Prime Minister, Gordon Brown, has abandoned the culture of spin of his predeceesor, Tony Blair. There are still many in Downing Street and Whitehall who understand well the attack dog mentality of the British press. If specialist commentators are covering an event they will do so sensibly and with restraint as they understand the subject and know the protagonists. It is different when an event becomes big news and is given to news hounds. Other readers have said already the attack dogs want to name the guilty. Are there lessons here for business executives? How King was treated suggests they should turn to experts for advice if they fear these attack dogs will be loosed on them.

Business executives assume the media can be so managed as to avoid unfavourable stories. It is assumed those who are criticised as Mervyn King was have failed. This is an incorrect way of describing the relationship between business and press in a democracy. Sometimes the press will criticise business. Those who are criticised often feel it is unfair. This is the price of having a free press. We in business must live with this.

Those in business who try to bamboozle the people must expect to be treated harshly. Mr King did not do that. He acted as he saw it in the best interests of Northern Rock and the wider banking system. He did what he believed was right and told no lies. Those in business who follow this model might be criticised but their reputations will soon be restored. The public always forgive those who make honest mistakes.

How to handle the media and the public spotlight should be required learning for all top executives.