Here’s How to Protect Your Company’s Business Reputation
A recent survey about what keeps general counsel “up at night” revealed that risk and crisis management are among their most pressing concerns. In fact, 63 percent reported that protecting their company’s business reputation is one of their top challenges.
The United States Federal Reserve defines reputational risk as “the potential that negative publicity regarding an institution’s business practices, whether true or not, will cause a decline in the customer base, costly litigation or revenue reductions.” While a positive reputation can be a valuable intangible asset, reputational harm can lead to a loss of trust with key stakeholders and significantly hurt your bottom line.
A recent example of a company that suffered significant reputational harm is Uber Technologies, Inc. Uber’s controversial CEO Travis Kalanick was recently forced to resign after his controversial business methods started doing more harm than good, including allegations of condoning sexual harassment in the workplace and berating one of Uber’s drivers.
Proactively Managing Reputational Risk
One of the biggest mistakes that businesses make is taking steps to protect their business reputations only after a crisis occurs. With the rise of the Internet and social media, managing reputational risk should be an ongoing initiative. While companies could once carefully shape the messages that the public received about their products and services, they have lost significant control in public forums created by the Internet Age. Through social media, anyone can post negative comments about a business (often anonymously) in real time.
The good news is that there are steps that companies can take to proactively manage their business reputations. Below are a few examples:
(1) Set the Tone at the Top: Mitigating reputational risk should begin with your company’s top executives and management staff. It is essential that the most visible members of your organization represent the core values of your company and take steps to avoid negative publicity. This includes carefully vetting not only the statements that top executives make to the media but also what they (professionally and personally) post to social media.
(2) Integrate Reputational Risk Assessment: When making key business decisions, it is important to assess the potential impact on your business reputation. To get a clear picture, gather feedback from all departments, including public relations, customer service, human resources, marketing, finance, and legal.
(3) Monitor Online Platforms: When it comes to protecting your company’s reputation, it is essential to act quickly. To be proactive, you must know what is being said about your business before it goes viral. Options for monitoring search engines and social media include assigning staff members to the task or using software programs to comb the Internet for you.
(4) Promote the Positive: In the words of Vince Lombardi, “The best defense is a good offense.” That means developing an online presence and using it to promote accurate and positive information about your company.
(5) Train Employees: Every company should have a social media policy for its employees. In addition, anyone who is authorized to speak on behalf of your company should be trained to manage reputational risk as well as to respond to potential threats. These skills are particularly important for anyone who engages with the public via social media, where statements are made in real-time and often can’t be edited once they are published.
(6) Plan for the Worst: Because it is impossible to control everything that is said about your company, it is imperative to have a crisis management plan in place. The plan should designate a staff member to assess the reputational risks of situations confronting the company, and, as well, to identify steps to manage reputational harm.
Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Robert Marsico, at 201-806-3364.
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
