Public Relations in Corporate Mergers and Acquisitions

The development of the world economy has given birth to a contemporary corporate governance system, in which mergers and acquisitions (M&A) play an important role
(Gaughan, 2017). Public relations (PR) are vital to the process of M&A and require
the coordination of all stakeholders involved to weigh up the feasibility of M&A,
conduct due diligence, deliberate on reorganization strategy, negotiate restructuring,
and reach a final agreement (Vieira, 2019). Nevertheless, PR can have adverse
effects on corporate governance (Kellaher & Kobe, 2003). In some M&A cases, the
management of the acquiring company and the target company have colluded,
through deliberately designed PR programs, to embezzle corporate assets and
equities, which have badly damaged the interests of shareholders, particularly those
of minority shareholders (Carroll & Sapinkski, 2011). In addition, some of the
controlling shareholders of listed companies have extracted personal information
through PR for their own benefit. This is a very dangerous practice, which could
result in insider trading without the disclosure of sufficient corporate information.
Therefore, PR needs to be meticulously supervised at all times and, at certain stages
of corporate M&A, should be prohibited altogether. This paper recommends that the
laws in this area be reviewed and PR speculation be subject to stringent laws. Rules
and regulations should be introduced to stop the abusive practice of stakeholders
using their power over PR for personal gain (Bowman et al., 2018). Corporate
executives and decision makers should maintain high moral standards and
professional integrity throughout all communications, both internal and external
(Maria & Samuel, 2017). In this way, companies could balance their profitability with
their moral responsibility to the community and ensure healthy and sustainable
development to better serve both society and the national economy