Communication as First Aid in damaged reputation

Nowadays, everyone demands respect. As if you were automatically entitled to it. My grandmother used to say that you had to earn respect. I think the same holds true for trust. That, too, is something you have to earn. In the case of companies, the trust of their stakeholders is no longer something to be taken for granted. This autumn, it's not only the leaves that are falling, but banks as well. Share prices are plummeting and faith in a good outcome is nowhere in sight. What can companies do to restore this trust? And which role does the corporate website play in this endeavour?

Recovery of damaged reputations

The American reputation expert Leslie Gaines-Ross uses the term ’the stumble rate’. The reputations of corporates are collapsing like houses of cards. How can they recover from this? Gaines-Ross employs a 12-step plan that consists roughly of the following steps:

Rescue
Rewind
Restore
Recover

Proactivity is the first matter of importance in all these steps. The only way to dispel mistrust is to communicate in an open and transparent manner. It’s a lengthy process that takes about 3½ years on average.

Recover reputation management

A summary of the steps towards recovery:

Companies have to admit what went wrong and engage in dialogue with their stakeholders. Non-communication or a reticent communication style are simply no options. And the corporate website is an outstanding medium to communicate transparently and topically about the company’s situation. Gaines-Ross and her colleagues at Weber Shandwick examined which measures companies in the USA, Europe and Asia took to restore their reputation. Based on the findings, they compiled the following list:

Steps reputation recovery

Fortis’ reticence

In July 2008 I was still singing the praises of the Fortis initiative www.fortis.nl/uwvragen. In October, the month of Fortis’ nationalization, its website went offline for a while. Fortunately, it’s back again. But what has happened to the Fortis corporate website in the meantime?

On 1 October 2008, a link was provided under ‘About Fortis’ that led to an ABN AMRO ‘update’ in which it was announced ‘as latest news’ that the consortium had advanced take-over plans. Clearly outdated information.
Since 3 October 2008, the Fortis bank’s homepage was identical to that of the previous month, apart from one little sentence, namely that the Dutch government had acquired the bank. Behind that, it provided a link to a press release in PDF format containing the promise that more information was to follow.

Fortis press release

Ahold’s long and winding road

In February 2003, Ahold came forward with the issue of overvalued equity. Not only did the corporate website remain silent, but it was also cleaned up because old annual reports had been removed. In that disastrous year and the year that followed, Ahold remained reticent in its communications. Even the image database intended for journalists had suddenly been put under lock and key. And the website was provided with extensive disclaimers.

This reticence was also reflected in Ahold’s scores for the FD Henri Sijthoff Prize. In 2003 and 2004, the company occupied a 15th and 16the place in the web rankings. A turnaround could be observed in 2005 when the company’s corporate website was awarded a sixth place.

It’s a shame that Ahold did not seize the available opportunities at an earlier stage. Fortunately, there are more and more examples of companies that communicate openly about their problems and concerns.

The good example of ING Group

ING not only displays the press release about the government’s capital injection on the homepage of its corporate website, but also provides clearly visible access to a Q&A interview with CEO Tilmant. Available as:

PDF presentation
Audio file
Video file
Transcript

A very complete way of communicating.

ING press release

The relativity of communication?

Of course, the quality of communications does not reveal everything about the quality of a company’s business operations. I’ll try to stay a step ahead of the critics with the following example.

During the presentation of the Henri Sijthoff Prize, FD Editor-in-Chief Ulko Jonker mentioned in September 2008 that Landsbanki had won an Iceland award for its financial reporting. I quote the jury report and the Landsbanki press release: ‘The report presents a clear and comprehensive picture of the bank's situation and the operations of its business segments, its funding and risk management.’

Naturally, communication is not the Holy Grail – far from it. But in these turbulent times, companies that do not communicate are suspect by definition. Companies can only win back their stakeholders’ trust by being completely transparent and openly acknowledging its problems.

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