The Ethics of Public Relations

A couple of weeks ago I brought you the story of Nike’s decision to end their support of the Livestrong charity group because of the fallout from Lance Armstrong’s admission of doping during his cycling career. It’s difficult to say how much these events have affected the company; Nike was only one of Armstrong’s sponsors, and he was only one of the company’s sponsored athletes. More to the point, perhaps, no reasonable person will hold any company responsible for what one of the athletes who endorses their product does on his own time. But since any company’s advertising budget is finite, and since there are any number of athletes available who haven’t just been dragged through the mud, it seems only reasonable for Nike to have attempted to distance themselves from Armstrong and everything associated with him. The question is, was it ethical for the company to have done so?

First of all, we’ve established that a company’s first responsibility is to its stakeholders – to the ownership group, whoever they are, but also to the employees, vendors, customers, and all of the other people who make their living interacting with the company. If further association with Lance Armstrong or any of his works would run counter to generating revenue for any of those groups, the company clearly has an ethical as well as fiduciary responsibility to cut those ties. Second, if we believe that the company has a responsibility to the cause of eradicating cancer (for whatever reason) that does not mean that supporting Livestrong is their only option; there are many other anti-cancer organizations that would be delighted to have their support. And third, there is reason to believe that Nike has already gotten Livestrong established well enough world-wide (by helping the charity distribute their iconic yellow wristbands) that withdrawing future support shouldn’t be a catastrophic blow. But even in this case the loss of a major supporter will not do the charity any good, and the potential for future harm is even greater…

For the sake of discussion, let’s assume that Lance Armstrong has done all of the things of which he has been accused; he has certainly admitted to some of them. Let’s further stipulate that Armstrong’s conduct runs counter to the spirit of athletic competition and fair play, and is thus a perversion of everything the company and its core customers stand for. This does not change the fact that the charity he founded has contributed to the eradication of cancer, or that its mission and activities will be unchanged regardless of any crimes that Armstrong or anyone else associated with it happens to have committed. Moreover, the loss of a major supporter isn’t just a question of money; it’s also one of legitimacy. Just as a celebrity endorsement lends credibility to a company’s product, so too does sponsorship from the company lend legitimacy to the celebrity – and in this case, his charity group. People who were inclined to discount Armstrong’s wrongdoing will be less likely to give him a pass knowing that his sponsors are ditching him, and people who were going to continue supporting Livestrong will be less likely to do so when they learn that the charity is losing its major backers…

Which leads me to the question: does Nike (or any other sponsor) have any responsibility to continue supporting Livestrong knowing that doing so may not serve their own interests? Does any corporate sponsor have any ethical responsibility to maintain support for a charitable organization after the founder of that charity has fallen out of public favor? Do the needs of the public outweigh the needs of the company’s ownership and other stakeholders? Does our answer to that last question change if the continued support touches off a stockholder’s rebellion that ultimately costs all of the parties involved missions of dollars in legal fees (which will also not go toward eradicating cancer or supporting any owners)? Or should every company allocate its charitable donations to whatever agency has the greatest need of support and/or the most critical mission, and let the public’s opinion fall where it may?

It’s worth thinking about…