Stick to the facts
18 Feb 2021
Read how to navigate this year’s challenges, including regulatory pressures, Brexit and Covid from Lawrence Dore.
Hint: Stick to the facts!
A Perfect Storm
2021 continues to present well flagged challenges to those involved in almost every aspect of corporate and political life. Economic and political pressure, regulatory change and post-Brexit trading arrangements, together with the impact of Covid, are creating a perfect storm which will need to be navigated on many levels.
Stakeholders are more mobilised than ever. The media is keenly questioning decisions taken and scrutinising detail which is becoming ever more available. Consumers want to know more and are ever more vocal voting with their feet (or wallets).
Investors are alive to risks, demanding higher disclosure and transparency. And employees have had a tough time – whether they have been furloughed, are adapting to new working practices, or simply worrying in the face of unrelenting uncertainty around the economy and their employment prospects.
Trust in the balance
Somewhere in the middle of all this, the question of trust and reputation is becoming all the more critical. Trust is hard to build at the best of times and is based on your ability to deliver on what you say, consistently. Long gone are the days of being able to give a clear steer on a forward dividend policy – today it is not uncommon to give no forward guidance.
Frequently, responses to Covid make commitments to employees difficult to make, creating uncertainty. Equally, stakeholder expectations of what constitutes ‘good behaviour’ make simply following the rules no longer an insurance against criticism.
The use, or not, of furlough is a good example – take the money, as encouraged by the government, but be careful not to end up too profitable as a result. Don’t take the money and face the fury of employees and unions for not protecting jobs. It’s a fine line to tread.
ESG is another example of this tightrope. Do you announce historic issues in your supply chain or diversity policies and the measures you are taking to fix them, and risk drawing attention to failings? Or do you work hard behind the scenes to remedy them and then get caught out and accused of hiding them?
Finally, for those sectors that have flourished, are bonuses acceptable and how does one ‘offset’ being perceived as a “Covid winner”? (PPE procurement and lobbying contracts spring to mind here as well…)
DRD has been helping our clients navigate some of the issues above and many, many more. There is no standard approach as each situation is different and is driven by the requirements and perceptions of differing stakeholder groups which must be assessed and balanced.
Building strong networks
What is consistent, however, is the need to establish trust and, for all my highlighting of ‘speed’, ‘change’ and ‘uncertainty,’ some principles remain as valuable as ever.
We still tell our clients that waiting until your house is on fire before assessing fire regulations is too late. Your reputational capital going into a crisis buys you time and gives you the benefit of the doubt. Equally, other new requirements have become paramount.
Clients need to assess their risks constantly and communicate how these are being addressed. On-going dialogue with all your stakeholders, day in day out, is critical here. If the first time you meet an official or a journalist is to explain what went wrong, the outcome is less likely to be positive.
Ensuring that risk management sits at the heart of your operation, that it is reviewed frequently and that actions are taken to keep you ahead of minimum requirements is the surest way to navigate the inevitable bumps in the road.
Data – a vital component to building trust
The new point, and one that I feel will dominate the reputation agenda this year, is that data – the facts – will divide those who emerge with their reputations enhanced from those who will fall under scrutiny. Here, speed is the enemy.
There’s always an easy ‘get out of jail’ card when facing scrutiny – something that makes the issue go away immediately, but the quick fixes rarely survive close interrogation.
A fudged figure, an off-the-cuff commitment to change, an assertion of no wrong-doing, a quickly cobbled together greenwash – all too easy, but often too tempting.
The alternative, and the right approach, is detail and data. Here, external advisers can be critical. They can challenge assumptions, they may understand certain stakeholders better or have recent relevant experience. They might simply be able to ask the questions that no-one else really wants to raise.
Clearly, if work has been done ahead of these moments of challenge, the right data may already be available. But if not, it is imperative that the true facts are established and interrogated from every angle before they can be used to form a response. This may mean that responses can’t be as complete as one might wish but honesty about what you know, and clear commitments to put in place measurement and data capturing for what you need to know can help establish firm foundations for the future.
Realism is also key – if for years a company has struggled to attract a diverse workforce, being honest about the challenge is better than issuing a commitment that can’t be met.
As always, there’s no quick fix and in a perfect world, we’d all be prepared for every eventuality. But if that’s not possible, stick to the facts…