I re-produce US PR Week’s leader column about non-disclosure of PR company financial information because it makes an important point and because (as I work for an independent company) I can. I know that many of the UK-based CEOs of PR companies owned by the big advertising groups would produce their figures if they could for PR Week’s league tables and most, privately, are furious about being muzzled. Their US bosses and the holding group accountants will not let them though and whilst this does not matter for the advertising companies in these groups, it makes the PR firms seem two-faced. How can we preach to clients transparency and then pretend we can’t produce our own figures? It makes it more difficult for clients to make agency purchasing decisions and the industry appear to have something to hide.
It’s time for agencies to stop hiding behind SOX
Each year, PRWeek gears up for our annual rankings, which will be published in our Agency Business Report on April 21.
We continue to wait in vain for revenue and staffing figures from the major holding company agencies. While many have perhaps forgotten that full and transparent disclosure of this information used to be standard practice, PRWeek – we can assure you – has not.
We continue to object to the specious reasoning that caused the holding companies to withdraw from participating in all industry rankings.
We object strongly to the perpetuation of the myth that Sarbanes-Oxley (SOX) mandates that holding companies not disclose this information. Make no mistake: these companies have elected not to reveal this information to shareholders and stakeholders, much less the readers of marketing titles. This decision goes against the spirit of increased and accurate disclosure that the act was meant to foster.
To be sure, Sarbanes-Oxley compliance is an expensive and labor-intensive undertaking. But even though their revenues are not publicly disclosed, holding company agencies have been GAAP-compliant in their reporting for years. There are no barriers to full transparency, other than a stubborn lack of candor on the part of the holding companies, and perhaps the fact that some agencies might have been less than buttoned down in their reporting in years past.
That is all the more reason why responsible firms must fight the lack of disclosure. For an industry that is the biggest proponent of openness and candor, the stance against transparency is increasingly indefensible.
[tags] PR Week, Sarbanes-Oxley [/tags]