Managing Reputation in Times of Disruption: Lessons in Real Time
April 20, 2020
On April 14, in the first installment of the McMaster Collaboratorium, Principal of The Directors College, Michael Hartmann and guest panelist John Crean, Senior Managing Director at TENEO Canada, take a deeper look at managing reputation: What are the best practices; how boards are trying to apply best practice principles under uncertain circumstances, and what might be the new set of practices and principles to emerge post-pandemic.
The board’s role is not to manage the crisis, but to monitor and measure the reputation of the business – which has real equity and value – to look at the factors that may diminish that value and then look at events that could have a precipitous impact on value or reputational equity.
COVID-19 is a largely unanticipated triggering event affecting all businesses and governments at the same time. Some companies are communicating and operating with the right stakeholders in mind in the short term. The long term impact if improper crisis handling will be interesting to watch.
Boards are less informed than management on what is being done in real time. Things are changing by the hour and the opportunity to inform and engage with the board may be impractical, but it is important. Boards are feeling isolated and lacking in details, but are extremely worried about whether the company is doing the right thing.
The pandemic changes a lot things for boards in their risk assessment and analysis. It’s time to go further in exploring worst case scenarios. Boards will be more open to spending time considering things that have a 1% chance of happening.
In the short run, Social Responsibility is being highly prioritized. Companies that are doing well, are not doing well based on financial performance – they are doing well because they are stepping up in their communities.
The tactics of communications do not change – the change will be in the message. Digital processes and communications will be expedited as a result of the pandemic. New skills and new investments will be required to expand digital capacities.
Boards will need to do a better job of measuring and valuing reputation. Companies will need to build some new resilience in health security and technology capabilities and risk.
Lessons learned so far:
Crisis preparedness needs to be better, deeper and more robust.
Boards need to rethink communications in the new political, economic and social context we are in and going forward in a post-COVID world.
Mitigation strategies for executive fatigue are important in the short term.
Companies will not get a pass in the second phase of this crisis – there will be a lot of scrutiny and re-opening will be another reputational risk.
Boards need to develop metrics to assess reputational risk and value.
Expectations for the CEO should place equal weight to how the crisis is being handled operationally and how the CEO is communicating to stakeholders – and new candidates for the CEO role and board directors in the future should be evaluated against how they might handle a situation like a global pandemic.
Click here to watch the webinar.