The BBC has recently been in the middle of some of the biggest media and communications failures of this decade. Beginning with their poor handling of the Jimmy Saville fiasco, where Sir Jimmy Saville was found to have committed child abuse and the BBC was facing allegations of conspiracy to cover up these matters. The BBC cancelled a Newsnight “special” examining the Saville allegations, however with Saville’s passing, it was alleged to have been decided within the BBC that the “special” would not be run, this got out to the rest of the media, who were more than happy to bring out their fingers of blame and point out faults.
The BBC decided to deal with the situation broadcasting an interview with the Director-General George Entwistle. During the interview it appeared as though Entwistle was did not receive any media training or warning, as the interview went so negatively that some apportion a lot of the blame for his eventual resignation to this interview. Entwistle took up a fairly defensive position, without taking any responsibility himself and failing to remain calm during a tough interview. After Entwistle’s resignation the BBC appointed a new Director-General.
Things only went from bad to worse for the BBC, when it was reported by their flagship programme Newsnight that a senior official in a previous government was involved in organised child abuse activity, without thorough checks or evidence. They were accused of false reporting and the allegations were denied. Which was a journalistic, ethical and legal disaster.
The appointment of a new Director-General, who is untouched by the fiasco appears to be a move in the right direction. However, due to the communications mishandling of the crisis and the issues surrounding it, the BBC’s reputation is severely tarnished, a reputation which will surely take a very long time to rebuild. The BBC may never be the same.
— DS —
Following the media recently, it seems to have been impossible to ignore, the negative stories about the banking industry, it seems as though the public have lost the little trust which they had in the banks, with Barclays’ reputation in particular being left in a bad state of disrepair, thanks to the LIBOR (London Interbank Offered Rate) scandal.
Barclays appear to have mishandled much of the crisis. This is atleast in part due to Barclays’ use of a “closed” approach to communications, with non-disclosure seemingly being made a priority. Such handling of the crisis is likely to have a serious negative effect on the bank’s reputation and in turn its bottom line. In addition, such an approach is likely to alienate the media and public. A more open approach should have been utilised.
A more open approach would have been more suitable, with an open line of communication between the organisation’s spokespeople and the media. Either the Chairman, CEO or COO should have appeared on the major television news channels, this would have given them the opportunity to lay the facts as they were at the time, while establishing themselves as the authoritative source of information.
Barclays should have focused its communication on explaining how the organisation felt about the crisis and its impact, perhaps some sympathy? Then the key message would have been to outline what actions they would be taking to remedy the situation. This should have also been backed up by a strategic operational and communications action plan.
Organisations should not take a risk with potential issues and crises, as this could leave their reputation and bottom line in ruins. A proactive approach must be taken. Such an approach allows for effective communications, operational planning and an organisation which is better prepared for crises.
— DS —
In recent times it has been becoming increasingly clear that bank stakeholders with shareholders in particular becoming more active then they have been in the past. The recent case of Barclays Bank shareholders standing against what many of the viewed as unjustifiably excessive executive pay is a case in point (Guardian article). This is an issue that is no longer just constrained to banking with recent developments (Daily Mail article) indicating that shareholders will take a stand if they feel they need to in other sectors.
A renewed effort in investor relations and issues management is required. It is in the interest of these businesses to protect their reputations and the best way to do this is do what is required to satisfy shareholders, after all once a business becomes a public limited company (PLC) they have a duty to their shareholders.
Shareholders invested their money within that particular business for a reason, they wish to make a gain and therefore care about what happens to the business. These businesses must work together with shareholders and their business communities by listening to their shareholders and stakeholders. Appropriate action may then be taken, which should have mutual benefit as a core guiding principle.
- DS -
According to the media this week, Goldman Sachs, the infamous investment banking and securities firm has recently had its reputation damaged. This is arguably due to the resignation of Greg Smith Goldman Sachs executive director and head of its equities derivatives business in the EMEA area. It can also be argued that the reputation damage was caused by the deteriorating practices within the firm which lead to Greg’s resignation after years of service.
Almost as soon as the article written by Greg Smith for the New York Times hit the shop shelves the company’s stock price dropped (Link), as shown in the chart below.
(Red point is the day the NY Times article by Greg Smith was published and the yellow point is the day after the article)
As soon as this happened Mayor Bloomberg of New York USA among others attempted to come to the rescue of the reputation of Goldman Sachs the next day.
It seems as though despite the disgust and disapproval of the alleged practices of Goldman Sachs by some, they [Goldman Sachs] are still holding strong. They may have escaped the “Muppetgate” scandal so long as there are no more high profile resignations in the near future. The only ways to decrease the likelihood of that occurring is through the improvement of the culture within the firm, putting more of a positive focus on the clients and giving the media the opportunity to see and understand these improvements. As the saying goes “Those who don’t learn from their mistake are destined to repeat them”.
Until next time all the best.
- DS -