In June 2021, Womble Bond Dickinson offered a comprehensive look at ESG from a variety of viewpoints. The “Doing Well By Doing Good: How Environmental and Social Governance Impact Your Business” campaign continued June 29 with a webinar discussion on how organizations can protect and advance their reputation through proper messaging. Participating speakers were Bank of America Market President for North Carolina Charles Bowman and Womble Bond Dickinson attorneys Nadia Aram, Claire Rauscher and Fred Rom. Womble Bond Dickinson attorney Mark Henriques moderated the discussion. Click here to watch the full video of the discussion. What follows are some highlights from this discussion and expected opportunities for growth.
Reputations are perhaps the most fragile asset any business has. Companies spend millions on brand-building and public outreach, but when a company loses its good reputation, no amount of money can buy it back.
“Reputation is incredibly important,” Rauscher said. “It affects everything—your business, your branding, your market standing.”
Building a positive reputation is important. But it is equally critical to be prepared to protect an organization’s reputation during a crisis.
Why Reputation is Important—You Want to be the “Good Guy”
As a veteran of the financial services industry, Bowman has seen reputations rise and fall. The mortgage crisis of late 2008/2009, for example, provided lessons to everyone in the banking sector.
“When your reputation is under attack, it takes a while to build it back up,” Bowman said. A negative reputation has ripple effects throughout the organization, he said, directly impacting employee morale as well as customer perception.
The best approach to public reputation management is to never give stakeholders the opportunity to form a negative perception. But even the best-managed companies can find themselves under public scrutiny—perhaps even through no fault of the company. So it is vital that organizations have carefully crafted plans to deal with the unexpected before it happens.
The best approach to public reputation management is to never give stakeholders the opportunity to form a negative perception. But even the best-managed companies can find themselves under public scrutiny.
Aram said that organizations need to be careful not to make unsubstantiated claims in advertising. For example, she said many companies today want to tout how eco-friendly they are, but they need to be careful not to overstate their case. Advertising is regulated, and federal and state regulators and plaintiffs’ counsel are all watching.
“In this day and age, anything can be considered advertising, including social media and investors’ reports,” Aram said. She advises clients to 1. Be transparent and 2. Be precise in any external statements that could impact an organization’s reputation.
“It can make you look foolish if you are overselling your reputation,” she said.
Bowman also said organizations should monitor how public communications by other organizations in the same industry are received.
“If it’s happening to them, it’s probably going to happen to you,” he said.
Addressing a Crisis—Preparation is Critical
Again, though, a reputation-related crisis can strike any company, and can take many forms, from an ill-advised social media post to an industrial accident. No organization can completely prepare for every contingency, so every organization needs a comprehensive crisis management plan in their back pocket.
This plan should include designating a response team, with roles clearly determined in advance. In-house counsel should know which attorneys (both inside the organization and outside counsel) can help in particular matters. In addition, the overall crisis management strategy should include specific action plans for the various possible scenarios.
And those scenarios can evolve quickly during a crisis. So organizational leaders should assume that once a crisis hits, endemic and pervasive confusion will abound.
“You can lose control quickly in a crisis—and then the crisis turns into chaos,” Rom said. Initial reports may not prove to be accurate, and organizational leaders will have numerous, often competing, demands for their time.
So during a crisis, making the right response, on the right timeline, is critical. Avoiding additional, self-inflicted harm is important, but can be difficult to do in the fog of a crisis. Having the right spokesperson to oversee the message and offer proper comments is key. Such a spokesperson should exhibit empathy for people adversely impacted by the crisis, while not saying anything that could implicate the company.
Avoiding additional, self-inflicted harm is important, but can be difficult to do in the fog of a crisis. Having the right spokesperson to oversee the message and offer proper comments is key.
“It can be hard in a crisis for your lawyers to review everything in real time,” Aram said. So team members should be trained in what they should and shouldn’t say.
Different Audiences Require Different Responses
Reputation management, particularly during a crisis, actually means managing an organization’s reputation with multiple audiences. These include government regulators, customers, suppliers and business partners, industry colleagues and the organization’s own employees.
Rauscher, who has represented companies in many government investigations, said too often, companies do not consider government regulators as an audience when making external statements.
“The government reads and sees everything,” she said, and what a company says publicly can influence how they are treated in a government investigation.
“The government reads and sees everything,” and what a company says publicly can influence how they are treated in a government investigation.
Companies also may have different audiences for multiple products and customers. These require messaging tailored to the specific needs of each sub-audience—and, again, this requires advanced planning.
Communications should be tailored with the target audience in mind, and should answer the following questions:
- What message is needed, and what is its purpose?
- When should the message be communicated?
- Who is the right spokesperson to deliver this message to the target audience?
- How should it be sent (i.e. what is the right communications medium)?
Once a communication is sent, assume it will become public. Employees with their own agendas can cause problems. So don’t say anything internally that you wouldn’t want repeated on social media or in the local newspaper.
Five Things to Avoid in a Crisis—and Tips to Protect Your Reputation
Avoiding a crisis completely through advance preparation obviously is the best strategy for crisis management. But as mentioned previously, problems cannot always be preempted. The panelists identified the following five common mistakes organizations make that can deepen and exacerbate a crisis:
- Failing to have a plan in place to deal with reputational crisis.
- Failing to address your true audience(s) and not plan your communications strategy around them.
- Picking the wrong spokesperson for the target audience.
- Overselling the organization’s reputation, which can make shortcomings even more glaring.
- Letting the issue drag on indefinitely. The faster an organization can resolve a problem, the sooner it can get past it and rebuild its reputation.
At the same time, there are steps companies should take in a crisis that can help make a bad situation less harmful to the organization’s long-term reputation. These include accepting responsibility if appropriate. Also, organizations should voluntarily assist those who may have been harmed by the crisis—and do it before forced to by litigation or regulatory enforcement. An organization’s own team members can make or break your reputation. So they need to make sure that employees who have been impacted by the situation are taken care of.
Above all, make a plan and anticipate the unexpected.
“You can’t be prepared for everything,” Bowman said. “But practice helps.”