I’ve just finished a book called Rethinking Reputational Risk and, as the title suggests, it’s really led me to think again about how charities manage their reputations.
Until now, I’ve always thought that the most senior communications professional should be the owner of reputational risk.
Why? Because comms people should understand an organisation’s audiences well enough to take an external perspective and so are best able to see reputational risk coming.
And, bluntly, if things go wrong then it’s us who have to manage the crisis.
But Anthony Fitzsimmons and Derek Atkins, the authors of the book, think chief executive’s should always be the owner of reputational risk and their argument is so persuasive that I’ve changed my mind.
Just as if you give someone a hammer then every problem starts looking like a nail, a comms person faced with the issue of reputational risk is likely to default to comms-related solutions.
But Fitzsimmons and Atkins make the case that reputational damage is caused by problems with culture more often than by lack of comms expertise.
Their analysis of crises, from BP to Barclays, from Volkswagen to Tesco, shows that the root cause is usually something that has gone wrong with the organisation’s culture. Often, people made bad decisions because of short-term incentives, a culture where the wrong values have taken hold, or one where bad news doesn’t get communicated up.
That is not to say comms is not important. After all, BP’s various PR blunders during the Deepwater Horizon oil spill show what can happen if you get your crisis comms wrong. But the book points to Tesco’s effective response to its accounting scandal as an example of how good crisis comms is only likely to take you so far.
Likewise, comms can play an important role in identifying and warning about things that have the potential to cause reputational damage. But it’s better for those things not to happen in the first place. And, as Fitzsimmons and Atkins suggest, reputational crises are much less likely to happen in organisations with great cultures and strong values.
This begs a question that is more important than who owns reputational risk on the corporate risk register: which reputational risks are listed on it.
After all, it’s relatively easy to look out of the window and list the risks you see in the world outside: an aggressive media; hostile stakeholders; your sector’s wider reputational issues.
It’s much harder for an organisation to ask itself what it is about its own culture that might lead to reputational damage?
But as hard a question as this is, it’s the most important one. And though it might make us uncomfortable, unlike some external risk factors it has the benefit of being something that it is relatively straightforward to do something about.