Koan PR director answers ethical slurs

ETHICAL PR agency Koan says it was right to collect the grand prix award at the North West PR awards, despite filing for administration less than 48 hours later.

Koan filed for administration on Friday, and many within its industry have questioned how ethical it was for the agency to collect the coveted Outstanding Agency gong at the CIPR awards on Wednesday night.

But managing director Elaine Mitchel-Hill said it was right that the team’s hard work and commitment were recognised, and added that she has  been supported by the CIPR in her decision to accept the award.

“I did feel it was the right thing to do to pick up the award. We were a contentious choice for outstanding agency but it was the only award we entered,” she told TheBusinessDesk.com.

“When Koan launched in 2002, the industry was reluctant to accept the notation of ethical communications and what Koan stood for. Now, six years later, not only have we been recognised for what we do, but we have been awarded outstanding consultancy in the region.”

Ms Mitchel-Hill has also been criticised for announcing the launch of her new business – Ethical Comms – almost immediately after putting Koan into administration.

Two staff have been made redundant, but the remaining three will move with Ms Mitchel-Hill to her new venture, which will launch on December 1 and also trade on ethical credentials.

But she said it would not have been ethical for Koan, which lost a major construction client and suffered bad debts of £40,000, to continue trading. 

“The existing business model was unsustainable. We therefore took an ethical approach of commencing the process of putting the business into administration to safeguard jobs and enabled the team to continue to deliver outstanding services to core clients in a sustainable business model. 

“We acted with integrity by refusing to trade the business when we wouldn’t be in a position to pay creditors as they fell due. The receivership process can ensure a better return for creditors compared to liquidation and the creditor position will be determined when the receivership process is complete.”

All of Koan’s existing clients will continue to work with Ms Mitchel-Hill and her team. The new business will be based at Kings Reach Business Park in Stockport, a virtual office with post and phone services and a drop in centre for meetings.

“We are not committing to new premises. No-one can predict the economy. We are going to keep overheads really low and see how things unfold in the next three, six and 12 months,” said Ms Mitchel-Hill.

“Re-emerging as another agency takes guts, it would have been easy to walk away. We are extremely passionate about what we do and truly believe that we have a valuable contribution to make to socially important issues,” she added.

Administrator Kevin Lucas at Ideal Solutions in Bolton said Koan had filed the forms to start the process of administration but that until the proces had been completed he would not know the company’s level of debt and could not be certain what would happen next.

“It’s a small business so it’s unlikely to be traded on,” he added.