Reputation is crucial. The combined value of reputations across the FTSE350 is £620 Billion and can contribute close to 50% of a company’s value according to Reputation Dividend, 2015.
But media attention need not be negative - the right response can have a positive impact on a company’s reputation, and provide an opportunity to showcase its brand and values.
1. Involve legal and PR early
Depending on their nature, reputational issues may be managed by different parts of the business but should always involve the legal and PR teams.
Things to consider:
- the nature of the reputational issue
- the stakes
- how the issue is unfolding
- core brand and values of the company
- obligations to regulators and investigators
- potential liabilities
- the more prepared and confident an organisation, the more likely that it can implement a successful response
2. Balance your response
The best response will be one that takes into account the interests of those affected by the issue and the business objectives of the company, not just the legal position.
Legal vs PR
Traditional PR approach - Tell it all, tell it fast, tell it truthfully
Traditional legal approach - “No comment”, deny liability, shift blame
Balance needs to be struck - Purely legal response may damage reputation, good will and share value; purely PR response may lead to huge liabilities years down the road in court
3. Prepare, prepare, prepare
Ensure your Communications department monitors various forms of media to track rumours and potential sources of negative coverage.
Be alive to negative coverage at particular times - the publication of financial results, executive bonus information, before or during legal proceedings.
Workshop potential crises that are foreseeable in your industry.
Establish procedures for expected and unexpected events - institute a crisis management plan, ensure direct line between communications and legal teams, ensure CEO or highly placed executive has media training.
- As a crisis unfolds:
- nominate a spokesperson for all media enquiries
- ensure close co-operation between PR and legal advisors when crafting key messages, press statements and interview talking points
- monitor media coverage to ensure it is fair and accurate
4. Consider your legal position
If (or when!) a journalist calls - don’t just follow your regular media contact plan:
- consider sensitivities
- is there a crisis plan or protocol to follow?
- gather the facts
- consider if or how privilege ought to be maintained over an investigation
- consider the legal position and strategy
- negotiate to avoid the story being published, if appropriate
If unable to prevent publication after correspondence, consider:
- seeking right of reply, so that the publisher or broadcaster will be obligated to present your side of the story along with the allegations
- how specific allegations or questions to be put to the company so it may respond
- making a written statement or allowing an interview with a senior executive
- pre-empting the article or report by releasing a statement or speaking to friendlier press to take the wind out of the sails of the negative report
- obtaining an injunction (usually unavailable to prevent publication of a defamatory article but may be obtained to prevent publication of private information)
5. Respond to negative media coverage
In the event that a negative story is published:
- aim to write a legal letter within 24 hours of publication
- locate evidence to disprove the accuracy of the article and to prove any damages
- seek an apology, clarification, damages and/or legal costs as appropriate
- consider appointing a spokesperson to deal with further queries
- consider a complaint to the relevant industry body (IPSO, Ofcom, BBC Trust, etc.)
- consider issuing proceedings
- pros - recover damages and costs, no more public a vindication of a reputation
- cons - expensive, may bring more attention to the allegations
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2019