It sounded good and probably made the corporate lawyers proud. However someone soon had second thoughts and a new statement was quickly issued which deleted the “tiny fraction” line and replaced it with: “Even one person crossing the line into illegal behaviour is too many and we greatly regret this conduct occurred.” We’ll never know what discussion took place between the PR Department and the lawyers, but it’s a pretty sure bet that cost to reputation was not the top priority.
Then, just weeks later, it was announced that banking giant JP Morgan Chase would pay a record $13 billion settlement with US regulators for selling bad loans during the housing crisis. This is, of course, the same organization which had recently paid $1 billion to US and UK regulators over the so-called “London whale” trading debacle, which cost their shareholders over $6 billion.
Is it any wonder that the Edelman Trust Survey found 27% of respondents around the world don’t trust CEOs to tell the truth, with banking and financial services the two least trusted business sectors. And the Weber Shandwick Safeguarding Reputation survey found the leading triggers of reputation failure are financial irregularities (72%), unethical behaviour (68%) and executive misconduct (64%).
None of this is much comfort to the naughty British tax officer serving time in prison. But it is a reminder for issue and crisis managers everywhere that 2014 is likely to be yet another challenging year.