Managing reputational risk in a time of coronavirus

Covid-19 | Covid-19 Advice | Employment & Skills | Reports

Written by David Engel, Head of Reputation & Information Protection at Addleshaw Goddard

Unsurprisingly, there is only one story that the media are interested in just now. Saturation coverage of the national and global picture has driven just about every other story off the front page, and the home page.

However, that does not necessarily mean that businesses can rest easy in terms of reputational risk.

In the first place, operational decisions taken today and tomorrow about how a business decides to treat its employees, suppliers and customers, could have long term reputational implications. Once the dust has settled and the immediate public health crisis has passed, the way that a business has responded may well come under the microscope, not just from the media but also from politicians, pressure groups, and stakeholders.

Unlike many crises, this one is not specific to an individual company or a particular sector. The default setting of suspicion of commercial enterprise which pervades certain sections of the media, and of wider society, will not go away. But equally, unlike in 2008, this is obviously not a crisis for which business, or a section of it, can reasonably be held responsible.

On the contrary, there should be plenty of goodwill towards businesses which are going to heroic lengths to reconfigure their operations and put their shoulder to the national wheel. There are already plenty of inspirational examples: Leon Restaurants launching the Feed The NHS campaign, companies like Dyson and the Mercedes F1 team turning their hand to the manufacture of ventilators, and numerous distilleries and breweries swapping spirits and beer for production of hand sanitiser.

Also, most people will understand that a crisis like this is a stress test for any business, whether because its revenue streams have all but dried up or because its supply lines and distribution channels cannot keep up with unprecedented demand.

What will distinguish businesses is how they respond, what operational decisions they take, and – crucially – how they communicate with their stakeholders. This might well have been the case in any event, but will likely be thrown into even sharper focus by the fact that most businesses have spent the last 10 years burnishing their CSR/ESG credentials and assuring the world that they live those values. Those values will now be tested, and may well be the measure against which their response is assessed in the coming weeks and months.

In addition, the current lockdown phase of the UK’s response creates its own, more short term – but nonetheless potentially difficult – reputational issues, given the daily controversies around social distancing, protective equipment and similar. Generally, these have surfaced in the form of health and safety issues because an employee or customer does not believe that a business is adhering to the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 and/or Government guidance (or ‘instructions’ as politicians are starting to call it).

Like many of the general public, the media is often unclear about the distinction between what the law now requires and what Government ministers or local authorities would like us to be doing. Often they are being led by the aggrieved employee or customer.

Stonewalling such enquiries can be risky. In such a situation, the business needs to be ready to respond to enquiries quickly, credibly and transparently. Inaccurate reporting needs to be averted, or corrected. That means it is generally essential to have the capacity to get on top of the facts rapidly and to have the requisite paper trail already in place, e.g. written health and safety assessments.

While many businesses may be in full fire-fighting mode right now, keeping an eye on the reputational horizon is as important as planning a commercial exit strategy.

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