Some firms may be conscious of the direct commercial impact the coronavirus pandemic could have. Fewer will have considered the reputational risk posed by the current health emergency.
The Personal Investment Management and Financial Advice Association (PIMFA) recently held a podcast examining how firms can manage, protect and enhance their reputations during the period of coronavirus disruption. The special guest on the podcast was Alex Just of Montfort Communications, a barrister who has advised a number of firms and public organisations on reputational issues when they have been faced with disputes and other issues.
Mr Just urged firms to consider not just their communications to clients but also their internal communications, saying it was vitally important that staff understood both their responsibilities and how the firm was adapting to Covid-19. It may also be important to ensure messages are communicated swiftly to investors, regulators or other parties in a reputational damage situation. The alternative could be more damaging if information leaks out before the firm has had a chance to give their official version of events.
Some of his key requirements for a firm at the present time are:
- Resilient – the firm is able to react to things it did not necessarily expect to happen
- Robust – the firm can continue to operate, and its supply chain and communication channels remain operational
Mr Just remarked on a recent trend for individual executives of larger financial firms to be required to appear before parliamentary committees, and when this occurs, reputational damage can obviously follow.
The speaker asked Mr Just how the Senior Managers & Certification Regime had affected reputational risk, and Mr Just agreed that this had been a ‘game changer’. When reporting a conduct rule breach to the FCA, the way the conduct was described, as well as the conduct itself, could have an impact on the firm’s reputation.
Mr Just said a “crisis” was just “an event that had been handled badly”, and in these circumstances, the quality of the response is vital. He said that the current circumstances may require some smaller firms to seek external help, especially if they lack experience of communications management or of dealing with the media.
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