Global Investigations Review - The law and practice of international investigations

The Practitioner’s Guide to Global Investigations

Protecting Corporate Reputation in a Government Investigation

05 January 2017

Brunswick Group LLP

35.1       Introduction

Long gone are the days where remaining passive and silent while your client is dissected during a high-profile government investigation was the only sensible approach. You need look no further than the steady stream of such inquiries over the past three to five years to see that persuasive, careful communications – in conjunction with the legal strategy – are the soundest way to preserve and rebuild a company’s reputation during a crisis and afterwards.

Of course, no two investigations are the same, and approaches to handling communications around them will inevitably differ according to, among other things, the jurisdictions involved, their media and political culture, and the particular agenda of the investigating authorities. So advice on communications strategy, just like legal advice, must be tailored to the circumstances.

Regardless of the tactics employed, the central objective of both lawyers and communicators is to achieve as successful an outcome to an investigation as possible, namely one that minimises lasting damage to a company’s financial position, its reputation and ‘licence to operate’, and its brand and wider commercial standing. Communicators can work effectively with lawyers to respond to increasingly assertive and sophisticated strategies deployed by government entities, particularly since the financial crisis of 2008.

In that context, some overarching principles can be distilled from the practical experience of acting for companies faced with corporate investigations and crises. These principles are discussed in the pages that follow, addressing the need for close collaboration between communicators and lawyers on worst-case scenarios, planning for and executing disclosures about such investigations, the importance of keeping key stakeholders advised as much as possible, and the critical aspects of managing the endgame of an investigation (see Chapters 33 and 34 on publicity).

35.2       Planning for the worst

The right strategy for managing reputational impact through an investigation depends on a range of factors: the nature of the behaviour under investigation, the authority conducting it, the brand profile of the company, the industry in which it operates and any damage to the public or consumers.

Moreover, the history of every company is different, and how an investigation will play out in many cases turns on how it is perceived as a corporate and social actor. Is the fact of an investigation into, say, corruption allegations a complete surprise because of the company’s sterling reputation, or will it be seen as the latest misstep of a recidivist? Equally important is appreciating the context of the investigation itself and whether, for instance, it may be enhanced, or even motivated, by the political agenda of a given government entity.

While understanding and appreciating these factors is critical to developing a successful communications strategy in the context of a particular investigation, one principle cuts across the approach to any investigation. In each case, companies that have planned ahead by developing and testing crisis communications plans fare better than those who have not. That is especially true where a company is involved in (and required to respond to) a dramatic, sudden, visually striking or fatal operational disaster, for example, an aeroplane crash or industrial accident, that subsequently triggers an investigation. But it applies equally to the unforeseen announcement of an investigation into issues, behaviour or incidents that may not have been in public view. These are all business-critical events. Knowing what to say and which lawyers and communications professionals to call in those first hours may be the difference between dealing with one crisis (the original incident) and several (the incident plus making up for legal and communications missteps taken in the heat of the moment) for months or even years to come.

Having a well-documented and well-understood crisis plan is also important even where the incident, and subsequent investigation, does not play out dramatically in real time. Investigations around corporate misconduct are an all too frequent example. It also pays to plan out these types of crises. For instance, and because discovery of corporate misconduct often has its genesis in internal investigations, companies typically have time to consider more fully how they will respond when the conduct eventually comes to light, and they should plan and test such scenarios. Even where there is less lead time – perhaps owing to a whistleblower’s actions or a required corporate disclosure – there is inevitably some period for strategic preparation. In those moments smart companies turn to communications strategies that have been developed to be consistent with and to support their legal defences.

The ‘disaster’ scenarios are guaranteed to attract significant media attention and will require regular and active communications by a company. With other kinds of incidents that spawn investigations – such as those involving bribery and corruption allegations, accusations of misconduct in the manufacturing supply chain, or accounting irregularities – it is often hard to predict at the outset the scale of the impact a company may be facing, making it all the more important to take action as early as possible to plan for different scenarios and to engage the right professional assistance. What may seem like an isolated incident likely to be a ‘one-day story’ could turn into something far worse if, for instance, deep-rooted company processes, historical conduct involving similar issues, the seniority of individuals involved or multi-jurisdictional problems are at stake.

Needless to say, the more systemic a problem appears to be, the more damage it is likely to cause to the company’s reputation. Even minor incidents can become reputational nightmares if they raise questions about the integrity of internal systems, compliance and ethics, culture, or management’s control of the organisation. As a result, the tempting choice for management – either to deny there is a problem or to rush to give public reassurance that a problem is limited to one or two individuals – can dramatically backfire.

Likewise, where an incident directly contravenes a company’s public image or the reputation of its brand, the stakes are inevitably raised. Fraud, bribery and corruption allegations will be problematic for any company, but all the more so if the company has publicly made a virtue of its ethical conduct.

Large multinational organisations are also always going to be at a disadvantage when it comes to garnering the sympathy of the public, particularly where there are identifiable victims of alleged misconduct or negligence. So, being prepared to get ahead of issues early is a critical aspect of any company’s reputational defence.

35.3       Ensuring close integration of legal and communications advisers

Planning for the fallout of a government investigation – whether that is done before the fact as part of crisis simulations or other preparation (which is preferable) or as the matter is unfolding (which is not ideal, but often the reality) – requires close collaboration between the company’s lawyers and its communications advisers. Few companies have in-house communicators with backgrounds or expertise in complex legal issues. So, just as a company will turn to outside counsel on major legal matters, it should turn to outside strategic communications advisers in similar circumstances.

The best-prepared clients understand the value of having a fully joined-up approach where the key speakers for a company (lawyers, communications professionals, investor relations teams, government and public affairs professionals) can coordinate regularly to ensure that every angle, stakeholder and perspective is covered. Working together, these individuals can also help ensure that messaging is consistent and disciplined with respect to all strategically important audiences.

The ideal way to proceed in these scenarios is to establish integrated teams that include in-house and external counsel and communications advisers who can work together in preserving or rebuilding reputation as the investigation unfolds. Without an integrated team, there is always the risk that communicators may be tempted to proceed without fully understanding the legal strategy, and lawyers will view the public communications concerns of a company as less important than questions of legal liability and the eventual adjudication of the matter. These are problems that are only exacerbated where the situation is highly complex, fast-moving and public. Furthermore, without integration, the company’s legal strategy may be forever undermined by inappropriate communications or the company’s reputation may be lost for an extended period (perhaps even forever) if the company fails to communicate (or miscommunicates) during a crisis solely to preserve the legal arguments. For example, a lawyer not considering the communications aspects of a situation might advise a company to point to legal defences available to a corporation, such as intervening causes, contributory acts of a third party or negligence limited to low-level employees. While all might be valid (and eventually briefed and argued in court), thought should be given to how technical legal defences are heard by the public, by regulators, by investors and even by a company’s employees. The goal should be to find ways to preserve the defences while communicating in ways that will be seen more positively by those stakeholders.

The benefits of synthesising communications and legal defence are legion. Communicators and others in regular contact with stakeholders can prove invaluable by providing the legal team with information, context and insights about how the investigation is perceived externally.

In addition to coordination, it is also indispensable to have in place sophisticated media monitoring tools throughout an investigation to track traditional media, social media and digital channels for any comments or interventions by investigating authorities, regulators, political voices and other relevant stake­holders. These include real-time reporting on news stories about the investigation and the company more broadly and monitoring or reporting on social media and blog discussions. Having alerts in place that go to all members of the integrated team to flag relevant developments for legal and public relations assessment is essential.

35.4       The key moments in any investigation

Having planned ahead and established the integrated team, the prudent company will need to prepare communications to manage external scrutiny and reputational impact on a number of occasions, but almost certainly at the following times:

  • public disclosure of the investigation, whether that is initiated:
  • directly, by the prosecutor or investigator;
  • indirectly, through actions (such as a dawn raid, arrest or confiscation of evidence) that attract public attention;
  • by the company through legally mandated disclosures (such as in a securities filing) or otherwise; or
  • through a leak (deliberate or accidental) from any of the parties or individuals involved;
  • high-profile comment on the progress of the investigation from interested stakeholders (media, analysts, investors, politicians, etc.);
  • leaks of key documents or other information during the course of the investigation;
  • the announcement of a settlement (or deferred prosecution agreement) and the initial response (which becomes an opportunity for the government to take centre stage);
  • parliamentary or congressional hearings in parallel with an investigation;
  • final decisions or judgments and the imposition of fines or other penalties;
  • court proceedings following an investigation.

In an ideal world, companies would have reasonable notice of any intention to launch an investigation, and particularly the intention of a regulatory body to comment publicly on proceedings. In practice, that often does not happen, especially where government investigators may perceive public relations benefits in making a surprise announcement.

In other situations, investigations will be launched in reaction to a media story, which means that the investigation, and more crucially the details of the allegations giving rise to it, will be public from the outset, and the affected company will necessarily find itself in a far more reactive mode.

If, by contrast, the company can self-disclose an issue or the existence of an investigation (particularly its own internal investigation), it will have an element of control over communications that is often absent where the government is making the decisions about announcements. Companies deciding to self-disclose may know the basic facts of the situation and have had time to work out the narrative to be presented in conjunction with the announcement. (In certain situations, it may even be possible to reach agreement on and coordinate such announcements with the authorities.) This period is a key window of opportunity for preparing the company’s communications messages alongside ascertaining the company’s legal position.

Another reputational issue to be considered is whether a company retains an independent investigator to conduct an inquiry into, for instance, ethical standards or compliance procedures, with the goal of having the independent investigator make remedial recommendations in advance of regulatory or prosecutorial authorities concluding their investigations. This step is not without its risks: many companies have found themselves in the position of making changes in the executive ranks because an independent investigator recommended it. But, in the appropriate circumstances, the appointment of an independent investigator can be extremely effective in helping position a company as seizing the initiative and communicating a sense that it is taking proactive steps to identify underlying problems while co-operating with an official external investigation. Should a company decide to proceed in this way, it will be an important moment to plan communications. Among other things (e.g., who to appoint and terms of reference), a company will have to consider whether it will agree to accept the recommendations of an independent agent, and whether it will agree to publish the resulting report, without reviewing them beforehand. In many cases, companies find that they have to do both. There is also the risk that if an investigator’s report concludes with predominantly positive findings for the company, it will generate accusations of a whitewash despite the demonstrable independence of the investigator.

35.5       The impact of whistleblowers

Another issue that can have a significant impact on communications strategy is the presence of a whistleblower. Increasingly, whistleblowers go directly to a regulator or a media organisation to expose what they regard as improper conduct or other wrongdoing. In many cases, the company has no warning of the whistleblower’s actions and may have had no opportunity to investigate the underlying charges, let alone devise a communications strategy. Moreover, given the disparity in stature of a corporation and a whistleblower, the strengthening of legal protection for whistleblowers in many jurisdictions and the media’s tendency to give credence to whistleblower narratives, a corporation often finds itself at a disadvantage when responding to allegations of this sort: being seen to pick on the ‘little guy’ is never a winning reputational strategy.

Some take the view that, because many whistleblowers are disgruntled employees (or ex-employees), their motives are tainted. Others see whistle­blowers as necessary and appropriate watchdogs to hold corporations accountable. Either way, companies must be very careful about deploying aggressive tactics to discredit them. Even where the whistleblower appears to be demonstrably compromised, a full frontal assault can backfire badly and introduce the perception that the corporation is a bully whose instinctive reaction is to lash out rather than accept the possibility that there has been a legitimate exposure of internal failures or wrongdoing by someone brave enough to speak out (see Chapters 18 and 19 on whistleblowers).

For all these reasons, the best (and often necessary) approach in most cases is for the company to respond to the sudden public emergence of a whistleblower with concern about the underlying allegations. The message must be put across clearly that the company is taking swift steps to investigate the allegations, that it takes seriously all allegations of the sort made by the whistleblower and that it has developed robust and effective procedures for dealing with concerns raised by employees.

35.6       Managing disclosures by regulators or prosecutors

Where an investigation is first made public by a government official such as a regulator, legislator or prosecutor, the company will have limited ability to influence the initial news cycle. The focus should turn immediately to trying to ensure that the subsequent reporting is balanced and fairly reflective of all relevant information. Of course corporations will also need to communicate with other stakeholders such as employees, business partners, shareholders through channels other than the media.

After disclosure of the investigation, a first question will be whether to react on the record. In most cases for companies, it makes sense to use a holding statement – even if only to buy time. Telling the media that the company is reviewing the charges, allegations or statements and intends to co-operate with the investigation is not much, but it is better than having no comment because it conveys at least some action on the company’s part. Depending on the coverage, that may be sufficient. Where the investigation is making a bigger splash, and particularly where it is proving unsettling to investors, staff and other key stakeholders, a more substantive response is often necessary once a proper evaluation has been completed.

Public companies may also be under legally binding regulatory disclosure obligations requiring them to confirm otherwise confidential investigations in market announcements. These may be helpful in ensuring the market does not overreact and that the news (with its potential consequences) can be reflected in the share price early. On the other hand, even where more limited disclosures, such as in the legal matters section of regular results releases or the annual report, suffice from a legal point of view, these may not be enough to prepare investors and other stakeholders for the real scale of what may come. The lawyers, communicators and senior leadership of the company should evaluate the best course of action. In any event, the disclosures will need to be kept under constant review.

Where it is clear that the worst has yet to come, it is generally prudent to take the longer view and disclose as much of the information about potential ramifications for the company as rapidly as possible, but with carefully considered language that indicates the company is prepared for and in control of the situation. Although it may seem counterintuitive, presenting the worst case scenario clearly and rationally can take a lot of the ‘fear factor’ out of market and wider stakeholder reaction.

The reason for this is simple: the media and other interested parties will want to piece together a narrative about the matter, filling in what they don’t get from official sources with either their own or other people’s speculation. Where it is possible to get the information out early, the company can effectively take the wind out of the sails of the speculation by preventing the drip-feed of details over an extended period, shortening the period of negative media focus. Of course this strategy, if pursued, must always be non-speculative and undertaken in close consultation with legal counsel to ensure that public statements are as narrowly circumscribed as possible to avoid potential damage to the company’s legal defence and misleading information reaching the market.

As well as public statements ‘on the record’, an additional question is the extent to which the company or its communications advisers assist media with ‘off-the-record’ guidance or conversations ‘on background’. These terms refer to the basis on which journalists are given information and are then able to use it. Constructive engagement of this sort with trusted journalists from mainstream media publications can be a useful and effective tool for conveying internally approved (non-privileged) contextual information and trying to ensure that prejudicial or inaccurate material does not make its way into reporting or, if it does, that it is corrected before it gains currency. Whether to engage, and the type of engagement appropriate in any given instance, will vary depending on a host of factors, including the particular jurisdiction.

All of this means that judging the right amount of information to disclose and on what basis is a delicate skill, and the best statements or announcements will always involve considered input from counsel, communicators and executives. This close coordination will help to avoid situations in which company representatives say or do things at an early stage that will look ill-judged in the light of subsequent events.

In addition, companies typically do well to avoid antagonistic or overly defensive reactions to criticism from regulators. Experience suggests that it is often better to be more circumspect, even if the company feels that criticism directed toward it is inflammatory, contentious or unfair. Snap reactions can lead to embarrassing climb-downs, especially when negotiated settlements may potentially be in the offing.

The best principle is to prepare for the worst while hoping for the best. Time spent preparing a toolkit of materials at an early stage will save time later on. If the company has prepared a crisis plan in advance – as discussed above – some of these materials will be readily to hand; others will be specific to the investigation and will typically include:

  • process timelines (with trigger points for media and political interest),
  • internal and external Q&As,
  • script points for customer relations,
  • draft statements,
  • stakeholder maps (charting the state of engagement with or understanding of influential parties),
  • leak strategies,
  • information on the company’s contribution to key territories and its broader social purpose.

These materials can always be revised as the situation evolves and should form the basis for any content that the company needs or wants to publish about matters relevant to the investigation or its subject matter. Content is essential in corporate communications, especially given ever increasing demands for information in a fast-paced multi-media environment and the appetite for digitally accessible material. It is the communicators’ job constantly to think creatively what materials may be needed for various purposes and for which particular channels, and to work with the legal advisers to ensure the messaging remains consistent with (and not a risk to) the company’s legal position.

Legal counsel and communicators need to be sensitive to the complex dynamics in these situations, including the client’s state of mind. Often the company’s instinct is to push for robust public expressions of innocence and determination to fight the allegations. They may feel they are as much victims as anyone else in the drama, on the grounds of having been let down by subordinates or dragged into a situation they feel they could never be expected to have known about. Equally, too, they may find it hard to go along with the pragmatism of advisers who have more experience of managing these situations.

From a communications perspective, part of the pragmatism is understanding that there are no quick wins when an investigation is announced. It is the start of a potentially long process – a marathon not a sprint, with varied periods of intensity and activity. The company should be prepared for that and to dig in for a prolonged period.

35.7       Communications with stakeholders

It may seem obvious, but paying attention to stakeholders other than the government and media is critical during an investigation. These include senior management, non-executive board members, investors, industry analysts, other government agencies with which the corporation interacts or that regulate it, business partners, suppliers, lending banks, customers or clients, and staff. Investigations can consume large amounts of precious management time, but the business must continue, and be seen to continue, to function day-to-day. Maintaining morale and keeping problems in perspective are vital. Business-as-usual communications are something senior management neglects at its peril.

For that reason, even where there are restrictions on what can be communicated, particularly during negotiations to resolve a matter, it is important to have a properly developed and approved set of messages that can be used to ensure that interested parties have a basic understanding of the situation, and are clear that it is being handled properly and professionally. A well-crafted announcement for internal or select external audiences need not say all that much to pay dividends in creating support and a sense of inclusion at a difficult time.

Negative headlines and unhelpful speculation can adversely impact staff morale and unsettle clients or customers, particularly if certain products or sales practices are under investigation. Equally, there can be an opposite danger – that well-intentioned but misinformed parties feel they are doing the company a favour by weighing in, either through a public intervention or by leaking information without appreciating the implications of their actions. For both these reasons, proactive communications to affected or interested parties are worthwhile. (See also Section 35.9.)

Whatever the type of communication, the essential touchstone is consistency of the message. While particular points may be emphasised more or less for each particular audience (what needs to be highlighted to investors may not be as relevant to clients or government contacts), there must be no contradictions or tensions in the core position of the company. This is again a key reason for co­ordination between lawyers and communicators: to ensure that the words used are approved for both internal and external use. Inconsistency in the messaging conveyed can cause real difficulty for companies, especially where a specific legal position has been agreed with investigating authorities and external communications are released that conflict with it.

35.8       Managing leaks

Although the substantive findings of investigations in virtually all jurisdictions are likely to be confidential until they have been concluded, leaks can occur for a variety of reasons. Generally, there is little in practical terms one can do to prevent them. In judging what, if any, strategy to deploy in response, it is again important to take a long view. It may not be ideal in the short term for a particular story to run; but coming out strongly against it may not help credibility and can store up problems for later when the company wants to be focused on rebuilding its reputation.

In any event, as set out above, having agreed adaptable leak strategies in place will be an important part of communications planning.

35.9       Role of third-party advocates

During investigations and related crises, third parties can often be helpful sources of commentary and information to articulate the company’s point of view – especially where there is media appetite for commentators and ‘talking heads’. Media and market analysts often need help understanding complex matters – both the substance and the process – and they frequently turn to industry experts, academics, former executives in the sector or even business partners. Communications professionals can be vital in developing these third-party sources and, in consultation with legal counsel, making sure they understand how to be helpful instead of harmful. In turn, those third parties can be invaluable in shaping coverage and external reaction, ensuring that the company’s position is properly understood, and closing down unhelpful speculation before it gains currency and becomes established as ‘fact’. In short, it is often useful to have a third party to steer media and other commentators to when it comes to reflecting or defending the company’s position.

35.10     To fight or not to fight

At some point in every investigation or subsequent litigation comes the question whether to continue fighting or to settle. Companies, their lawyers and their communicators do not always see eye-to-eye on the right approach, and that will always depend on the circumstances. But companies would do well to understand the difference between what might get results in legal proceedings and what is convincing in the public arena. A perfectly valid legal strategy might actually alienate public opinion if, for instance, it sounds like an attempt to evade sanctions for serious moral or ethical failings by dint of a technicality. In those cases, litigating – even to victory – might do more long-term damage to the company’s reputation than an early settlement would have. Which is not to say that the company should not fight – it should just think through the ramifications of doing so.

In some cases, it may be preferable from a reputational standpoint to acknowledge missteps and seek to resolve the matter early. Where this course includes a clear plan for dealing with any wrongdoers and a remediation plan, it can pre-empt the investigation’s findings and help to draw a line under the issue. Often such a step can be beneficial in more ways than one, since plans like these are typically required when resolving a government investigation.

The concept of co-operation is obviously also a key element in handling investigations – from both a legal and a communications perspective. Companies may well assert that they have been and are being open, co-operative and transparent with investigators. But difficult issues can arise – especially in criminal investigations – when a company is either directly pressured to disclose material it considers is legally privileged or otherwise feels compelled to do so to demonstrate the extent of its co-operation with the investigation. Public tensions or arguments with investigating authorities about privilege tend to favour the authorities themselves because it is easier for them to create the impression that the company is being obstructive in refusing to give them the documents they have asked for than it is for the company to explain to the media and other parties why it believes privilege obtains, why privilege matters as a fundamental right and why assumptions should not be made about a refusal to waive it.

The point may be academic in circumstances where, as happens more and more often in the US at least, the government insists on a waiver in deferred prosecution agreements (DPAs) (which have more recently been introduced in the UK) or a criminal plea – although a waiver may not necessarily be a precondition of a DPA.

Ultimately a company will make this decision after careful deliberation based on all the circumstances, including the legal and financial implications of a refusal to waive and the possibility of prolonging or expanding the investigation. But where it feels that it has no real option, the release of privileged documents will then need to be considered in the context of communicating about the investigation.

35.11     The endgame: announcing a settlement

When it comes to positioning a company for announcement of the outcome of an investigation, several factors need to be considered. In the run-up to the announcement, the legal team needs to coordinate closely with communicators to make sure that any public statements are properly aligned with the agreed facts of the case. This is obviously paramount where companies have entered into deferred prosecution agreements with the authorities in which they are bound by prohibitions on making – or authorising lawyers, officers, directors, employees, agents or subsidiaries, etc. to make – any public statements contradicting the agreed statement of facts about the company’s conduct. Procedures need to be in place to ensure that anyone speaking on behalf of the company – either in connection with the announcement or in other media or public stakeholder engagements (e.g., financial results presentations) – knows what it is permissible to say.

More broadly, so much of the approach to positioning an investigatory decision depends on the nature of the investigation, the sanctions or remedies imposed and the consequences for the particular company. Key questions will be:

  • What are the core communications materials that the authority is itself planning to release or distribute on the day of announcement? Will it just be, for example, a press release with a copy of any relevant decision notices, rulings or agreements?
  • How does the authority intend to choreograph it? Will there be a press conference and background briefings? Will the authority’s leadership be giving news interviews for print and broadcast media?
  • Where an investigation has involved more than one authority (domestically or cross-border), will the lead authority lead the communications? Are the authorities coordinating on communications?
  • What is the range of sanctions against the company? Is it just a fine (which is likely to be the media focus)? Or are there other remedies – remedial compensation schemes, disgorgement of profits?
  • How do the sanctions compare with other similar high-profile cases in size and scale?
  • What are the potential consequences of the sanctions for the company?
  • What are the other conditions attached?
  • Is there a right of appeal?
  • Are there likely to be satellite civil litigation proceedings or criminal prosecutions, perhaps against specific individuals?
  • Will there be political reaction to the decision? If so, by whom?

Investigators, prosecutors and regulators know only too well that the opportunity to announce a big settlement against a corporation is their day. Their narrative will be taken to be the definitive account and will stand for official purposes as the public record. Seeking to contest that narrative where appeal is unavailable or unlikely is often not recommended (and may be forbidden), particularly as any attempt to contextualise, mitigate or otherwise play down the gravity of the misconduct is likely to backfire in reputational terms.

Nonetheless, a well-developed plan to position the settlement is a must for the company. A number of factors will need to be considered in the plan. In some cases, regulators will expect the company to issue statements expressing contrition, also perhaps setting out consequences for key individuals. This may entail resignations of senior management or board members. Even where this is not an express condition of a settlement, it is often the only credible response. Media and politicians may also expect there to be financial consequences for management who remain. Whatever the particular case, the company’s statement will need to draw a line under the matter by conveying a concerted sense of moving forward. This can usually best be done as much out of the limelight as possible – press conferences or interviews with senior management, for example, can often force the company to go back over the very issues it is trying to put to bed.

Share price movement following an announcement will indicate how the market greets the result for public companies, and the impact may not necessarily be negative. Share price may even go up if shareholders broadly expected or are relieved at the result and welcome an end to the uncertainty of a prolonged investigatory process. But there may nonetheless be genuine questions that investors or other stakeholders will want answered. Given the size of some of the post-2008 settlements in the financial sector, investors have had legitimate questions about financial impacts and funding for the required payments.

In some cases, banks have had to announce capital raising measures to plug gaps left by fines. In these circumstances, companies need to have a clear plan in place for addressing all their key audiences, including (for public companies) capital markets through regulatory announcements. In addition, staff morale and relationships with certain customers may have taken a bad knock and may take concerted efforts by management over a long period to repair. Large customers and shareholders will need contacts at the right level of seniority. The roll-out plan will help to ensure that these conversations are properly sequenced to fit any public communications as well as internal briefings to both senior staff and line managers, who will in turn have to speak to key stakeholders.

35.12     Rebuilding reputation

Rebuilding a company’s reputation actually starts the moment an investigation is first reported and continues throughout, including at the announcement of an outcome and beyond. Regardless of how the media perceives each of these points in the road, difficulties will arise if the company is seen to have failed to address or be addressing issues adequately. In such cases, other voices such as politicians or investors may start to wade into the conversation, raising the pressure on the company. In such situations, the only way to resolve the situation definitively may be to take steps that the company had hoped to avoid and to take them in circumstances where those measures will be seen to have been forced on the company.

Even if the headlines fade quickly, memories tend to linger. Companies care about their brands and reputations, so they will need to devote significant time, thought and energy to repairing damaged relationships and restoring trust. In many cases, the remediation plan will require difficult actions or statements that convey genuine remorse and a desire to change on a cultural level, and potentially some more practical measures to repair specific failings in procedures and controls. The goal will be to move the company from being seen as part of a wider problem and position it as a proactive part of the solution.

To achieve that outcome will require an honest appraisal of the mistakes and a determination to do what is necessary to rectify them. Serious polling and data-driven analysis will help identify where exactly the reputational damage lies and also help track success in tackling those issues and clawing back trust. Crucial and often forgotten is the need for extra vigilance to ensure that the company avoids committing further errors. In the recovery period, even the slightest issue risks being blown up and setting the company even further back. It is important, too, that the chief executive owns the reputation recovery plan and that he or she and everyone else involved understands that actions really do speak louder than words.

35.13     Summary – 10 key considerations

In summary, and drawing on the above, the following is a practical checklist of communications considerations to bear in mind when navigating an external investigation:

  1. Context: Understand the company’s backstory and track record, as well as any political agenda of the investigating entity.
  2. Planning: Undertake as much advance planning as possible, preferably through crisis exercises, and preparation and planning.
  3. Integrated teams: Put together a core integrated team to ensure that the legal advisers are plugged into the communications function and other key functions (e.g., investor relations, public affairs).
  4. Active monitoring: Have in place monitoring tools to track continuously for media coverage, both traditional and on social media channels. Information about who is commenting on the process or wider debate, influencing opinion and affecting the climate, is essential.
  5. Core content: Content is king. Put together a core suite of materials that can be continuously updated as events change – process timelines, key messages, Q&A, holding statements, stakeholder lists and general information about the company’s contribution to key territories and overseas markets. Consider creation of public-facing content that can be accessed or distributed digitally via the company’s communications channels.
  6. Consistency of message: Ensure there’s consistency of messaging – jointly developed by the legal and communications teams (with input from other functions) – around key moments in the investigation, especially the final outcome.
  7. Stakeholder management: Consider what the company’s most immediate key audiences (beyond the media) understand about the investigation and its implications for them, and what the company can say to keep them informed: senior management, non-executive board members, investors, industry analysts, other government agencies with which the corporation interacts or that regulate it, business partners, suppliers, banks, customers or clients, and staff.
  8. Third-party advocates: Identify third parties who can potentially provide helpful comment about the process or about the company more generally: industry analysts, former executives in the industry and business partners. Equally, know the company’s enemies and who might weigh in against the company’s interests.
  9. Business as usual: Convey a clear sense that the company is in control of the investigation and that the leadership is focused on the process of getting on with day-to-day business.
  10. Reputational rebuild: Consider throughout the investigation what the company may need to do to communicate genuine cultural or behavioural change, using the investigation outcome as a pivot point for building the company’s reputation.

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