Imagine yourself as a newly-minted, honours-showered graduate from a world class business, marketing or management school. Lots of exciting career possibilities crowd your head: renewable energy, robotics, electric vehicles, affordable housing, to name just a few. You lay out company and agency profiles and analyses across the table and consider the risks and benefits of each, and the leverage an early strategic choice might have if more exciting but highly competitive priorities were unrealistic at the moment.
How likely would it be today that such a short list would include a tobacco company? How would your resumé look to other employers later if they could see you’d made the choice to work for a tobacco company?
The tobacco industry has suffered public and corporate reputational bottom-feeder status for decades.
A 1993 corporate image study prepared for Philip Morris in Australia found the company were fellow cellar dwellers with other tobacco companies, running last against all other companies in the mix:
A year later in 1994, an Australian Financial Review article quoted Nick Waterford of Michael Page Recruitment saying:
“I don’t think there’s any doubt that it’s harder to get enthusiasm for tobacco companies. There is a trend. If you have ten qualified candidates and you tell them it’s a tobacco company, five might say they don’t want the job.”
In the same piece, a former industry employee said:
“From a personal and family point of view, it just became wearing having to discuss and defend the industry at every dinner party we went to.”
In the 26 years since, things have almost certainly got a lot, lot worse.
An analysis of 5 years (1993-7) of Australian press reports mentioning the tobacco industry found routine narratives and memes of the industry as callous merchants of death, corporate leviathans, toxic pied pipers beguiling children, and blood money grant dispensers engaged in conspiracies to cover up awkward facts about death, addiction and targeting kids.
A 1999 South Australian survey on community perceptions of honesty and ethics found tobacco industry executives rated lower/very lower (73.6%) than even car salesmen (67%), the time-honoured low watermark of trustworthiness.
By 2004, 79% of Victorians (and even 71.3% of smokers) believed tobacco companies never or mostly don’t tell the truth. Can there be any other product where so many of its customers think those making and selling it are so dishonest?
And by 2010, the global Reputation Institute reported “Again securing the last place [reputational] ranking [of 25 industries], the global tobacco industry’s average Pulse score dropped 4.4 points” with 51.24, against an all-industry average of 64.2. And there was daylight between the 24th place getter (diversified finance) and tobacco in last place.
No further reports have since been sighted but you could bet your house that if these had shown any upward movement by tobacco, the industry’s spinmeisters would have issued frenzied, gushing releases on the good news. But tellingly, there’s been utter silence, so go figure.
The companies love to publicly congratulate themselves on social media when they rank anywhere remotely respectable on anything other than their core business. Their pool room display cabinets are full of awards no one has ever heard of for every conceivable virtuous activity: affirmative employment action, greening policies, charitable giving, even picking up litter (where cigarettes butts are always the most common item). Yet global awards for annually causing the early deaths of two in every three of their longest, most loyal customers – more than 7 million a year — are strangely uncelebrated.
Decades of relentless, unflushable bad news like this inevitably reduces the quality of staff prepared to work for such industries. Big tobacco has become the index case for shorthanding corporate malfeasance. Just try googling “just like the tobacco industry”, and stand back while a Niagara of appalling fellow travellers pour down the screen. The world has long calibrated corporate ugliness against the tobacco industry, although coal and other fossil fuel industries may by now be pressing their case for the most-loathed prize.
The tobacco industry has set the low watermark for corporate indecency and indifference to the consequences of its key performance indicators on the health of millions of people. Unless they have been in a 40 year coma, those joining the tobacco industry in 2020 do so with their eyes wide open to the toll wrought by the tobacco products which are the backbone of every tobacco company. While some staff would rationalise their decisions after a long draft of industry kool-aid about the recent embrace of ecigarettes and other putative reduced risk products, the day-to-day of working in a tobacco company for most employees remains all about selling as any cigarettes as possible.
In 2016, before the big tobacco companies went into turbo drive to promote their “transformation” into quasi public health agencies via risk reduced products, Mike Daube and I published a collection of statements companies had made to government corporate regulators about the risks that the companies faced, which were relevant to investors’ decisions.
Altria (Philip Morris USA’s parent company) reported that, “Altria Group, Inc. may be unable to attract and retain the best talent due to the impact of decreasing social acceptance of tobacco usage and tobacco control actions … our strategy of attracting and retaining the best talent may be impaired by the impact of decreasing social acceptance of tobacco usage … ”
The Lorillard Tobacco Company reported that, “As a tobacco company, we may experience difficulty in identifying and hiring qualified executives and other personnel in some areas of our business. This difficulty is primarily attributable to the health and social issues associated with the tobacco industry”.
Philip Morris International report “… We may be unable to attract and retain the best global talent”.
And Reynolds American report “… Recruiting and retaining qualified personnel may be difficult given the health and social issues associated with the tobacco industry”.
These are all code for “understandably, most people aren’t rushing at the opportunity to work for a company whose addictive products cause the annual death of millions”
So how do they see their prospects of attracting top tier staff today? At Altria the company report to the US Securities and Exchange Commission for the quarter ending Sept 30 2019 stated:
“We cannot guarantee that any forward-looking statement will be realized … You should bear this in mind as you consider forward-looking statements and whether to invest in or remain invested in Altria’s securities …we are identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in, or implied by, any forward-looking statements made by us … These factors include the following …
- our inability to attract and retain the best talent due to the impact of decreasing social acceptance of tobacco usage and tobacco control actions”
How many other industries and companies would make a special point like this about the calibre of their staff being a possible risk for investors? It’s unlikely that they are referring here to their cleaning staff, their janitors, their gardening, driving, factory or secretarial staff. It seems far more likely that they are alluding to planning and marketing staff employed to maximise sales; to corporate affairs and government relations staff charged with defeating, diluting and if all else fails, delaying tobacco control policy which might adversely impact on sales; and to scientific staff who know which side of optimising nicotine addiction their salary bread is buttered on. And did those at the top who signed off these statements believe they might also apply to them?
So where do these tobacco companies get the idea that the “talent” they recruit and are able to retain may not be the very best? Does it come from intelligence gathered from recruiting agencies, urged to be candid about the quality they are seeing? And frankness about how many fine applicants run out of the room when it’s revealed an anodyne job description is in fact a job in a tobacco company? Or is it from facing up to the hard reality that there has been not a single policy or piece of legislation the industry has fought and won since they first tried and failed to defeat the very early tepid pack warnings, and every generation since? That the tobacco industry is where you go if you are going to fail to stop policy that will be bad for your industry. “What did you achieve in your last job?” “Oh, we lost every battle we fought.”
When I interviewed Australia’s Nicola Roxon, the former health minister and attorney general responsible for introducing our historic plain packaging laws, for our book, I asked her why the Labor government had done it. One of the most emphatic reasons she gave, described in the book, was that “it was a no brainer politically – everyone hates the tobacco industry.” They believed, accurately, that they would be cheered on by all sides of politics (except the tiny irrelevant libertarian fringe), by the public and even by large proportions of smokers. Those we interviewed for the book often made comments about how underwhelmed they were about the staff who led the local industry and fronted for it in media advocacy.
When the companies themselves feel obligated to acknowledge this issue explicitly to corporate regulators, it would be very interesting to be a fly-on-the-wall inside the industry as they struggle to work out this seemingly intractable problem.