Bell Pottinger Scandal

PR firm Bell Pottinger has been involved in a scandal, making front page news since law firm Herbert Smith Freehills reviewed their work with the Gupta family. This confirmed that they had indeed breached ethical standards set out by the Public Relations and Communications Association (PRCA). The purpose of a PR firm is to to assist in promoting a positive reputation of the companies they are employed by, especially in the media. Yet the media has certainly turned on Bell Pottinger, after the accusation that they have promoted racial hatred in South Africa.

Herbert Smith Freehills reported that ‘certain material created for the campaign was negative or targeted towards wealthy white South African individuals or corporates and/or was potentially racially divisive and/or potentially offensive’. This revelation has led to twelve of Bell Pottinger’s high profile clients such as HSBC, St James’ Place and Carillion severing all ties with the company, ensuring they are not tarred with the same brush. However, this is not all bad new in the world of business, as other PR firms have been provided with the opportunity to snap up these high profile clients as they look for a new PR firm to represent them. It has also provided Herbert Smith Freehills with billable hours as they were commissioned to conduct the review upon the unethical campaign and accountancy firm BDO the opportunity to advise on the sale of the damaged firm.

Although, firms who act for clients in disrepute must be cautious, as despite offering growth prospective if they effectively deal with the issue, they also risk damage to their reputation by association. George Sard of Sard Verbinnen & Co has analysed this scandal as ‘Clearly demonstrate[ing] once again how important it is to avoid taking on the wrong clients’, viewing it as a warning to the business world regarding who they choose to represent.

The scandal has certainly opened the eyes of the PR industry as it has been brought into disrepute, but also of the financial institutions associated with the industry.