Your organisation’s name has landed on the front page of newspapers, it’s being thrown around loosely by newsreaders, the press is demanding interviews with your top management, and your reputation is coming crashing down by the second.
An employer’s most valuable asset is of course their employees, but just as important is their reputation. Any hits to an organisation’s reputation can be devastatingly costly. Ironically, the cause of reputational damage is usually non-complying employees.
When ineffective compliance training and lax policy and risk management solutions are left to filter through, a crisis awaits at the final tipping point. Poor risk, governance and unethical procedures leave your organisation open to reputational damage.
So how can you successfully rebuild a tarnished reputation?
Earlier on in the year, Corporate Risk and Insurance interviewed David Van, founder and managing director of a reputational risk management consultancy. He recommends the following two solutions to put your organisation back on its feet.
1. Ensure that risks of any other possible damaging problems are eliminated. This means carrying out an audit of any other existing reputational risks.
“Once something’s happened any other issue, no matter how small, will be highlighted and will only compound on the damage already done. Something that might have been of no interest to media or other stakeholders previously can have a compounding effect. Because that company is already in the media you’ll see often following a crisis any other coverage will have a tagline (relating to the first crisis). It tends to follow them and any other news gets tagged with that. This makes it difficult to get positive messages out.”
2. Have closure on the crisis – whether that is by a legal case or inquiry.
“The best way to do that (if it’s not subject to an external inquiry) is for the company itself to commission an independent inquiry and then publish the results of that,” Van said.
“If there’s ligation afoot then you must let it run its course, but if there’s not it’s a very good step for companies to demonstrate transparency (transparency is a key driver of reputation). It is very beneficial to go through the exercise of investigating how it happened, clarifying what the error was and demonstrating that it’s not going to happen again.”
Van also recommends exploring the possibility of participating in a seminar explaining to other companies how they can avoid going through a similar crisis.
“A lot of companies baulk at this because they don’t want to talk about what’s happened but people know that bad things can happen and the loss of reputation mostly derives not from what happened but why it happened and what you did about it,” he said.
“As you went through it, people will want to know that you learnt from that lesson, being genuine and showing how something happened and saying to other companies here’s what happened to us, here’s how you can avoid the same thing, is a really good step to do that. If you show genuine remorse and genuine efforts as to how and why it won’t happen again your reputation will come out the other side stronger than it was before,” he said.
After taking these steps Van advises it’s a matter of doing your normal promotions, PR and advertising but with sensitivity to what’s happened.
GRC Solutions recommendation
The most significant preventative action an organisation can take to avoid a crisis and reputational damage, is to implement an effective compliance training program, and a streamlined policy management solution that will keep your employees on top of your workplace culture, rules, regulations and acceptable behaviour.
Systems like these also mean that if a crisis were to strike that you have auditable trails of policy and procedures and evidence of staff being trained on topics such as anti-money laundering, workplace behaviour and insider trading. It’s the proof in the pudding that preventative measures were taken to avoid such a dilemma at all costs.