Benjamin Franklin was quoted as saying:
“It takes many good deeds to build a good reputation, and only one bad one to lose it.”
In response to recent calls by Liberal Democrat peer and barrister Lord Lester to modernise UK libel laws, I have decided to focus this entry on one element of libel – Reputation.
A good reputation in business is established by gaining and retaining the confidence and trust of a business’s stakeholders (customers (or in the case of Apple Inc., worshippers), suppliers, employees, and of course, shareholders). Although some business reputations may be gained over a relatively short period of time (consider Google and Facebook), most frequently it takes longer to maintain trust and confidence of stakeholders through differing economic cycles.
You need look no further than the recent travails of Toyota and more latterly, BP to realise that business reputations, though hard to win are quickly lost. Loss of confidence by any group of stakeholders, particularly consumers and shareholders, can quickly lead to the decline of any enterprise (though it should be noted that we have no idea as to the long-term impact to both BP & Toyota – time will tell), most strikingly in service businesses such as professional services or finance. Remember Arthur Andersen LLP?
Without a reputation, you have no business; therefore reputation is important to any enterprise.
Although reputation is an intangible, it is a highly prized, invaluable asset, which is intrinsically linked to the goodwill of the business. It is viewed as the most critical risk and a key source of competitive advantage as products and services become more replicated and less differentiated.
Good reputational risk management is achieved by managing all other risks satisfactorily. However, changes in business practices arising from increasing governance, red tape, legal and regulatory influences have made companies more vulnerable to reputational damage. Equally, the pervasiveness and intrusiveness of media (particularly social media) and communications industries has intensified the focus on both corporate and high profile individual reputations.
You = Brand
As a celebrity or other high profile individual, you are your brand.
In today’s celebrity-obsessed, paparazzi-filled world, actions are microscopically scrutinised to stalker-esque levels, with the mainstream and social media ready to pounce on the slightest chink in celebrity armour. Although for some, any publicity is good publicity, for others (who shall remain nameless), this is not always the case… their names are added to the proverbial “Where are they now?” lists and consigned to nostalgia conversations and the occasional pub quiz.
Celebrity reputational management is therefore a must in order to retain a degree of control of both on and off-line media. Whether you are selling books, music, movies or lending your voice or likeness to market someone else’s products or services, you are the commodity and – for the benefit of you, your family, friends and other “stakeholders” – your reputation and character must be protected.
Reputational Management Basics
Managing reputations comes from the top. In a business, this runs from the CEO, Board of Directors, senior management downwards. If you are a high profile, public personality, then it starts with YOU.
Key elements of managing reputational risk:
- Prompt and effective Communication with stakeholders – shareholders, employees, customers, fans (for individuals) and suppliers.
- Proactive monitoring approach… Prevention is more effective than the cure!
- For businesses, strong and consistent controls on governance, legal and ethical compliance, which for individuals, can be translated to mean: Don’t break the law.
- Establish a crisis management team with a clear plan in order to deal with a problem as soon as it arises.
It has been said that “a moment lasts all of a second, but the memory lives on forever.” This is particularly apt when considering reputational risks. Once tarnished, a reputation is difficult to repair and often, other areas of the enterprise will suffer.
If you or your business have any questions relating to legal reputational issues and would like a free consultation with a member of our Media Law Team, please contact us on 020 8209 0166. If you prefer, you can contact us by email at firstname.lastname@example.org.
About GAD LLP’s Media Law Practice:
Gregory Abrams Davidson’s Media Department is experienced in acting for a variety of media, technology and entertainment companies, celebrities, sports personalities, investors and professionals involved in the sector. We cover many media-focused legal issues, including reputation management, privacy and defamation, Intellectual Property, Entertainment, I.T., telecommunications and E-Commerce, film, TV, music and publishing. We provide a reliable and efficient service, constantly striving to provide practical, commercial, cost-effective legal advice to achieve the right result for our clients in the shortest possible time.