By Stephen Murphy and Georgie Collins at Irwin Mitchell

Reputational risk is nothing new but in the extraordinary times we find ourselves in, what has come to the fore is how vital reputation management is and how difficult it can be to manage in times of crisis. This is particularly so, at a time when the move to an online world has increased exponentially.

How an individual or organisation responds to the challenges presented by COVID-19, whether operational, strategic or financial and amongst the whirlwind of employment, contractual and other legal and commercial issues can directly impact reputation – good or bad.

Below we set out our top tips to identify your risk and manage your reputation.

1. Business Continuity and Supply Chain 

The Covid-19 crisis casts the spotlight on an organisation’s Business Continuity Plan and whether it is fit for purpose. COVID-19 has presented risks for many that had not previously been contemplated or had not identified as being urgent/business critical.

The reputational risk profile of each business is different depending on variables including sector, size of business and varying degree of internal and external threats, for example, the extent to which a reliance on technology plays a role in the business.

For example, have you:

  • placed increasing reliance on technology and remote working for business continuity?
  • struggled to fulfil orders/bookings as a result of the lockdown and associated restrictions?
  • accessed the job retention scheme and furloughed employees or made redundancies?

All of the above can have an adverse reputational impact on businesses and we discuss these below in more detail.

2. Cyber and Data security 

Most cyber security/risk & crisis management plans were not formulated with the prospect that all staff would be working from home and that at incident could come at a time when the infrastructure of an IT system was overloaded and more vulnerable. Many organisations have been forced to effect changes at great speed, adopting a roll out programme that otherwise might have taken months if not years to achieve, with the inevitable risk that security is compromised and there are gaps in its systems which play to third party threats.

At the same time, external threats such as phishing and social engineering are on the increase as fraudsters seek to take advantage of any vulnerability in a remote working system and praying on individuals personal vulnerabilities.

We recommend checking that you have necessary robust contracts, policies and procedures in place to ensure that data held, or sent, by you or third party providers acting on your behalf is dealt with appropriately and securely and you identify any risks associated with the potential disclosure (deliberate or innocent) of your proprietary and confidential information.

3. Online brand management 

When responding to the challenges posed by COVID-19, individuals and organisations must be mindful that what they do now will impact how they are viewed in the future.

With supply chains under huge stress at the moment, particularly where imported products are concerned, many businesses are struggling to comply with their obligations and either supply customers or honour contractual obligations made pre-lockdown. Where this impacts consumers, disagreements can quickly escalate to a situation where customers become frustrated with the business’s inability (often for perfectly legitimate reasons in the circumstances) to supply which in turn can lead to cancelled orders and negative online reviews or comments on social media, garnering unwanted publicity and influencing other consumers away from your brand towards competitors.

Careful thought needs to be given to how respond in a way that is reflective of an organisations culture and how it wants to be perceived, Pre COVID strategies where a hard line was taken in relation to the posting of negative and/or defamatory comments, may now need a refresh.

4. Corporate and Strategic Communications 

Many organisations are having their company values put to the test when it comes to their actions in balancing the support and protection of staff and customers with income and profit. A communications strategy for employees, partners, suppliers, authorities, and the public is key to a risk management plan

In the age of social media, where “cancel culture” can spread like wildfire through hashtags and shares, companies can’t afford to get this wrong. One only needs to compare the headlines of those organisations that have taken a short-sited and profit over people based decisions, such as the use of the Government’s furlough scheme as a way to reduce costs while asking remaining staff to take on more work is likely to face reputational damage and deteriorating employee engagement. Contrast this to those who have instead used their resources to support key workers, such as by providing, food, clothing, transportation and accommodation to NHS staff - those actions will have lasting implications for customer loyalty and trust.

Georgie Collins, Partner, and Olivia Oxton, Solicitor, from our Intellectual Property & Media team are hosting a webinar on Thursday 11 June 2020 at 2pm where they’ll be discussing this topic in greater detail. If you’re interested in attending, please click here where you will also have an opportunity to submit questions to in advance.