Tesla’s Reported Elimination of PR Department is Dangerous

, Tesla’s Reported Elimination of PR Department is Dangerous

PR Week, the New York Post and other media outlets reported yesterday that Tesla (NASDAQ: TSLA), the largest automaker in the world by market capitalization, according to CNBC, had eliminated its public relations department.

If true, the move would leave media, and potentially customers, shareholders and other stakeholders without transparent access to important company news and information.

Both PR Week and the New York Post reported that they did not receive a response to a request for comment from the automaker.

In an era of #fakenews and gaslighting, this is a troubling development for the practice of professional public relations. Now more than ever, stakeholders need clear, articulate and transparent information from organizations, both in the public and private sector.

Elon Musk, the company’s co-founder and CEO, has more than 39.1 million followers on Twitter and will presumably continue to use the platform to be the voice of the company.

What is unknown from the above-referenced reports, is whether the company’s investor relations team was disbanded, as well. Such a move could leave the company open to potential “Reg FD” disclosure violations. According to The Securities and Exchange Administration, “regulation FD addresses the selective disclosure of information by publicly traded companies and other issuers. Regulation FD provides that when an issuer discloses material nonpublic information to certain individuals or entities—generally, securities market professionals, such as stock analysts, or holders of the issuer’s securities who may well trade on the basis of the information—the issuer must make public disclosure of that information. In this way, Regulation FD aims to promote the full and fair disclosure.”

In response to the reported dissolution of Tesla’s PR team, the Public Relations Society of America (PRSA) issued a statement saying, “Recent news reports indicating that Tesla has eliminated its public relations department are alarming. If true, this action sets an extraordinarily dangerous precedent for blocking the continued free flow of information from one of the world’s most innovative and influential companies, as well as impacting the media’s ability to responsibly cover an organization’s activities.

In a world fraught with instability, disengagement is not a path to success and can result in dramatic reputational ramifications with long-term consequences as current events continue to make exceedingly clear. Strategic communication counsel is a critical element of reputation management, as is a robust, fully functioning, effective and transparent communications process supporting the public’s fundamental right to know and the media’s ability to provide in-depth reporting.”

As a PRSA Member, Moxē shares the professional association’s sentiment. In such a difficult and challenging year, companies should be trying to communicate more, not less.

The media deserve it. Tesla’s customers, shareholder and stakeholders deserve it and the public deserves it.

As the Arthur W. Page Society expresses in its “Page Principles,” companies should “Conduct public relations as if the whole enterprise depends on it,” further suggesting that “No strategy should be implemented without considering its impact on stakeholders. As a management and policymaking function, public relations should encourage the enterprise’s decision making, policies and actions to consider its stakeholders’ diverse range of views, values, experience, expectations and aspirations.”

Disclosure: Michael Monahan is a shareholder in Tesla.