Panel 3: Public relations

Fordham Journal of Corporate & Financial Law, 2003 by Rubenstein, Howard J, Fisch, Jill, Elsen, John, Arkin, Stanley S, Smith, Randall

PROFESSOR FELSENFELD: Our next, and final, panel of the day will be a discussion of managing reputational risk-how the word gets out, what corporations say about themselves and how they present themselves to the world.

Heading this panel is Howard Rubenstein. Mr. Rubenstein is the President and CEO of one of the largest independent public relations firms in the country and a very influential voice in the presentation of corporate reputation. Happily, although Mr. Rubenstein is in public relations, he is here at a law school and I learned that he is a lawyer. So you are legitimate. He finished first in his class in the night school division at the St. John's University Law School. A professor takes that very seriously. He is a Trustee of the Police Athletic League. He is a Trustee of the Central Park Conservancy. He served on the Mayor's Committee on Business and Economic Development for Mayors Beame, Dinkins, and Giuliani, so this wonderful city, this greatly improving city we see all the time, is in large measure due to Mr. Rubenstein's activities.

So let me turn it over to you. The floor is yours.

MR. RUBENSTEIN: Thank you very much.

The issues we will be looking at today have taken on a great urgency in recent months. Until the Enron scandal, very few people had any opinions at all about corporate accounting methods. Why should they? The economy was booming and most investors felt they were becoming richer, partly as a result of corporate behavior. Today, months after Enron broke, the market remains extremely volatile. You all know that. Some analysts tie this continued roller coaster to a fall in corporate reputation. Suddenly, public perception of how you do business may be just as important as the numbers in your earnings report.

We are going to explore this issue today from a number of different perspectives. I am fortunate to be joined by four very distinguished panelists, and I would like to introduce these people to you now.

Stanley Arkin is a founding member and the Senior Partner of the law firm Arkin, Kaplan & Cohen. Stanley has been lead counsel in some of the most significant business crime and insider trading cases of the last twenty years. He defended Vincent Chiarella in the first insider trading prosecution, a landmark case that Mr. Arkin took successfully all the way to the Supreme Court. He writes a regular column for The New York Law Journal on business crime and is the lead author of Business Crime, a six-volume definitive text.

Jill Fisch, who many of you know, is a Professor of Law and Director of the Center for Corporate, Securities, and Financial Law at Fordham University. In addition to teaching at Fordham, she is a member of the American Law Institute and serves on the faculty of the New York City Law Department's Civil Trial Advocacy Workshop. She is a past Chair of the Committee on Corporation Law of the Association of the City of New York. Professor Fisch's scholarship includes work on corporate law, securities regulation, and federal courts.

John Elsen has been Business Editor of the New York Post for the past three years. Before that, he was Business Editor and telecommunications reporter for that newspaper. Previously, he covered mergers and acquisitions at Investment Dealers Digest, and he has also covered general news for a range of papers, including the Hartford Courant and the Bergen Record.

Randy Smith is a reporter for The Wall Street Journal who covers the securities business. This past year, he and his colleague, Susan Pulliam, won the George Polk Award for Financial Journalism for their articles about investigations by the National Association of Securities Dealers ("NASD") and the SEC into improprieties related to the allocation of hot IPOs during the Internet stock boom.

Here is how we will proceed. I will ask a series of questions based on some feedback I have had from the panelists. Some of the questions will be directed at them individually and others will be addressed to the group at large. I encourage the panelists to jump in after any panelist gives an answer. And mix it up. We will have a free run. Keep your answers short so that we can get a lot of questions on the table. And let's try to have some controversy and a good, solid debate.

I will start with John Elsen. The 1980s and 1990s have seen the rise of the so-called "celebrity CEO." We have all seen that. And, as you know, the bigger they are, the harder they fall. Should the media take any responsibility for having created these largerthan-life CEOs? Doesn't the media expect too much in terms of performance from these CEOs? Very often, in cases with which I am involved they blame the media; they do not even blame themselves. Are you to blame?

MR. ELSEN: Of course. Yes, it is true that the press does take a great interest in people, partly because our readers take a great interest in people, and executives have really become celebrities in their own right, as you mentioned. That is partly because we cover what they do, but largely because of their incredible impact on this country. It affects everybody's lives. So we write about that.