Flag pulls dedicated staff person in the U.S. in favor of consultants, U.K. staff.

By Dennis Schaal

Despite the surge in CSR reporting in the United States, CSR communications agency Flag decided to take a lower profile in North America, opting to close its one-person Chicago office in favor of servicing its high profile clients with consultants, and with staff, from its Cambridge, U.K., headquarters.

In tandem with the decision, apparently made by parent company Computershare, Flag CSR communications consultant Christina Siun O'Connell recently left the company.

O’Connell became Flag’s CSR communications consultant in September 2005 when it opened the Chicago office as part of a planned expansion in North America.

Formerly a director of CSRWire before moving to Flag, O’Connell told The CRO Wednesday that she plans to remain in the CSR industry, although she declined to reveal her next post.

The operational changes at Flag appear to have more to do with business decisions at Computershare than about the viability of the U.S. market.

The decision to close the Chicago office likely came when Computershare decided it would be easier to expand Flag’s CSR reporting capabilities in Europe than to make further investments to bring additional resources into the North American market, despite the growing popularity of CSR reporting stateside. Computershare is an Australia-based financial and communications services firm.

In a 2005 study, KPMG found that CSR reporting among Global 250 companies climbed to 52 percent, from 45 percent in 2002. And the 52 percent mark in the United States compared with 80 percent in Japan and 71 percent in the U.K.

Paula Ivey, Founder and President of the CSR Group, said any decision to pull away from the U.S. market would be contrary to the trend.

"The Computershare fit [with Flag] never made a lot of sense to me," Ivey said, adding that Computershare probably didn’t see Flag’s work in the United States as part of its core business.

"There is no question that there is long-term growth in the U.S. market," Ivey said. "It was probably a business decision that was made internally and it was not about the market."

Flag’s North American branch handles CSR reporting and communications for several major corporations, including Walmart, Kraft Foods, Petrobras and Royal Bank of Canada. Several accounts, including Ford and Chevron have always been handled from the U.K., while the U.K. and Chicago offices serviced some North American clients jointly.

The operational change in the U.S. "did not have any impact on our clients or their ongoing projects," said Jeff Stein, a Computershare spokesman in New York City.

Stein noted that the regulatory environment in the U.K. makes for a more mature CSR reporting market than in the United States.

"Here [in North America] it’s something new," Stein said. "You’ve seen a bump in the past few years, where really in Europe it’s been top-of-mind for the average person and in the U.K. it’s been top-of-mind for a decade."

However, Stein declined to position the changes at Flag in the U.S. as any downgrading of its commitment in North America.

Stein said Flag will continue to serve U.S. clients, but with staff from Europe or consultants who will work out of Computershare’s offices on a project basis.

"Any changes are the result of wanting a more efficient and effective way to bring our worldwide expertise and support to U.S. clients," Stein said. "As it stood, we had only one staff member in Chicago for all of the U.S. With our international network, dedicated staff in the U.K. and consultants, we are positioned better to bring the best of what we do to clients in the U.S."

He claimed that Flag will have "more on the ground support" in the U.S. as staff from Europe and consultants work near clients from Computershare offices in Boston; Chicago; New York City; Edison and Jersey City, N.J.