In the financial sector, the trust stakeholders have placed in companies has been damaged both at industry and company level whether due to failures in governance, risk management or ethics, or due to excessive reward structures.
Companies need to take this issue seriously to rebuild their reputations. So what should they do?
There are three key groups of actions.
Demonstrate good practice and compliance
To start with:
- Given the visibility, dissection and discussion of the various problems that occurred in the sector, companies need to demonstrate good practice in all these problem areas even if during the crisis some or all of the issues did not impact them.
- If the company have been affected by issues, they should show how those areas have been addressed and verify that the actions have been done.
- They should be among the first to address new recommended industry practices (e.g. the Walker recommendations) and to communicate their compliance with them – and how they have met them.
Apply crisis management techniques
The second group of actions is related to standard crisis management techniques.
Few companies responded to the financial crisis by applying crisis management techniques to their online communications, for instance by:
- business leaders acknowledging mistakes
- empathising with stakeholders and indicating how seriously they take the issue
- describing the root causes of the problems
- stating the lessons learned
- providing their action plan to address the issues.
Even now, as we wonder if the storm has passed or if there is another to come, there is still an opportunity for companies to take a leadership position by communicating what their sector has learned from this.
Show – not tell – trustworthiness
The last area is for companies to outwardly demonstrate trustworthy behaviours in their actions and communications:
- better transparency means more explicit information on how you ensure effective oversight of the company, how you manage risk and how you incentivise your senior people
- better ethics means going beyond the standard code of ethics – and talking about how you embed ethics in your business through your training and compliance processes
- better listening means demonstratively providing the means to listen to – and interact better with – stakeholders through the channels you use – including the website.
June 22, 2010, London”The past year has seen tremendous change in the financial services sector…
It is time, however, to look forward, to put the lessons from the past in context and look to see how communications professionals can focus on their reputation and position their companies, their products and their brands.”
I could go on – indeed we’ve written a whole strategy piece on it (do contact us if you’d like to discuss it) – but I’m sure you get the idea.
The Communicate Magazine’s conference next week on Reputation in Financial Services explores strategies for managing corporate reputation, and will bring together industry experts and advisors to share best practice; there’s a strong programme, and many expert speakers lined up.
Do read the programme, and consider attending – it looks good.