Associated Press
Friday Mar. 1, 2002
NEW YORK - Worried about being tainted by the same sort of accounting scandals and corporate conflicts that accelerated Enron Corp.'s downfall, corporations across the county with no direct links to the failed energy giant are trying to boost their credibility.
They're well aware that they have to do so quickly and get a positive message out to shareholders, industry analysts and the media. The efforts, coming in the midst of a recession, have turned into somewhat of a boon for public relations firms that specialize in making companies look good, or at least keep them from looking bad.
"Now there's a totally different look at things," said Bob Dilenschneider, chairman of the New York-based Dilenschneider Group public relations firm. "It goes to the whole issue of corporate governance and how governance is looked at, accounting and how accounting is looked at. All these have huge public elements to them."
Public relations agencies are being called in to help companies plot strategy - how to convince shareholders and the public that they don't have any of the problems that the Enron debacle exposed. Changes being made by companies range from ensuring that their board members are truly independent, to determining whether they are disclosing enough information about their finances.
In essence, corporations are asking, "How do we become as clean as the driven snow?" Dilenschneider said.
Late last month, Apple Computer announced a new policy banning its auditors from performing consulting services - eliminating a potential conflict similar to that at Enron, which used Arthur Andersen for both auditing and consulting work.
General Electric Co. on Feb. 20 warned that its upcoming annual report could end up as thick as a Manhattan phone directory after the company promised more information about its accounting practices and businesses. GE will provide revenue and operating profit figures for 26 businesses from its industrial and financial services units. Previously, the company reported on 12 business segments.
The most intense scrutiny on a company suspected of having problems similar to Enron has fallen on Tyco International Ltd., a Bermuda-based conglomerate which has been barraged by criticism of its disclosures and accounting practices, prompting a 50 percent drop in Tyco shares since December.