Reputational Risk Management – The ‘Nuts and Bolts’ – CONCLUSION
Managing Reputation Risk
Companies with strong reputation are noted for their commitment to quality. Quality is built through quality people, quality processes, and quality products and services. Companies committed to quality have a strong discipline to improve continuously.
The above concept also stretches to ‘Quality Public Reporting’. SEC (Securities & Exchange Commission), the Central Bank of Nigeria CBN, NDIC, NAICOM and indeed all financial regulators have always emphasized this in carrying out regulatory functions in the Nigerian financial system. Few years ago, two leading quoted multinational companies in Nigeria were engaged in ‘balance sheet padding’. These, when discovered, brought their reputation to the lowest level since their foray into the Nigerian market and it took the institutions very long time before these matters fizzled out from the public consciousness. This was after both companies CEOs had lost their jobs and their shares in the market had taken a significant ‘whipping’. The lesson here follows the popular saying that ‘you can fool some people sometime but you cannot fool all the people all the time’.
This is very relevant in managing reputation risk.
Why do we think a company would devote a lot of resources to organizing customers forum, employees engagement session, meeting with suppliers, regulators, shareholders, lenders and indeed all other stakeholders on regular basis? It is to continuously gauge the stakeholders’ opinion by asking the question, who do people think we are? Gaps that are discovered during such interactions (expectation – reality gap) would therefore be carefully worked on with the aim of closing or at least reducing such gaps. This strategy of managing reputation risk is very useful, not only in the private but in the public sector. Nigeria is in such a quagmire due to very wide expectation-reality gap fuelled by lack of genuine, regular stakeholder engagement. If the Senate of Nigeria today can genuinely organize such engagement to know the true feelings of Nigerians about the upper legislative house, they may see the need to change their approach to governance. Ditto for the executive.
Treat your stakeholders intelligently. Do not think that your stakeholders are unaware of your company’s sharp practices. Refusal to pay insurance claims whenever there is accident or loss, deliberate overcharging of customers’ accounts by some banks, packaging of 25kg products as 30kg by manufacturers, cancellation or rescheduling of flights without compensating the customers, recharging your internet data for one month only to find out that it has finished within two weeks and loading your phone with a promo recharge card of N1,000 which gets exhausted within
a day instead of one week (as stated in the promo ) are some of the ways in which the stakeholders are taken for granted by their service providers. Any organization that cares about managing its reputation should learn to treat their stakeholders intelligently.
Work as if everything you say and do is public.
When David Cameron, the erstwhile British Prime Minister uttered a statement that ‘Nigeria is fantastically corrupt’, there were only few (prominent) people standing directly with him; the Archbishop of Canterbury, the Queen of England, Queen Elizabeth and two others. Never would Cameron have imagined that the statement would leak out, NEVER. But it did leak to the whole world. Sam Alardyce, the erstwhile coach of England secretly uttered a statement that was detrimental to the interest of his employer, the English Football Association. He never imagined that this statement would ever find its way to the public. It did, and it cost him his prestigious job. In managing reputation risk, organizations and its leaders should learn to work, talk and act as if everything they say and do is public. The best kept secret will come out one day– for instance, the USD 9.8m kept by Yakubu, the former NNPC boss, in an air-conditioned room in a remote location, was not revealed ‘spiritually’ but by a physical being. Neither were the recent N450m, N4Bn and 15Bn hidden cash found by EFCC. So there is no secret anywhere. Don’t do it is the best secret.
Finally, Build long time relation with the media
Sound Media relationship is a sine-qua non in managing reputation risk whether in the private or public sector. The media which the organization ‘cultivates’ project the organizations’ positive (see attached) and do everything possible to kill negative news by preventing them from filtering out to the public. Donald Trump, the President of America, began his regime on a sour relationship with the Press. Less than 100 days after, he now knows better .