The rules have changed in the battle to restore credibility
The Banking Royal Commission has flipped credibility and trust on its head. Here, Powell Tate's Jacquelynne Willcox explains how the rules have changed.
Corporate Australia’s get out of jail card is looking very worn. A combination of long suffering customers with a national voice, concomitant political opportunism and red-faced regulators
gunning for relevance, signal years of legal warfare and bloody battles to rebuild reputations.
A series of inquiries, including a Royal Commission, across banking and finance, infrastructure, franchising and building developments have revealed corporate conduct that barely represents
decency. And this corrosive behaviour appears to have extended to our corporate watchdogs, whose task it is to ensure the rules are actually followed.
Last year, for example, the interim report of the Banking Royal Commission highlighted regulatory failings in ensuring financial institutions were placing customer interests before commercial targets.
The final report, due on February 1, will be more scathing with predictions that prosecutions and civil actions, including class actions, will follow.
Trust, as they say, is in deficit.
And it is not just the finance industry. We haven’t yet touched on the shocking reports of abuse in this country’s $20b Aged Care industry. These will become more prevalent as the newly installed
Aged Care Royal Commission begins taking evidence.
So, in what promises to be a massive display of catch-up, 2019 will be the year of the hyper-active regulator. Juxtapose this with 2018’s year of class actions, which legal industry reports say totalled
half-a-billion dollars in payouts.
Indeed, it is now axiomatic for litigation to be touted in any public outrage, including that which has followed recent chaotic, trouble-prone building projects stretching from CBD’s to outer suburbs.
Corporations are not the only targets. Governments and bureaucrats are also in the firing line in the search for culpability.
So what can organisations do to ring-fence their brands, get some trust back and withstand scrutiny?
They should start with an honest audit.
Organisations that undertake brutal measurement of performance and public perception find the pain and embarrassment worth it. An organisation might survive a strictly legal review, but will it
pass ‘the Pub Test’ or the broad terms of reference of an inquiry or Royal Commission? Many confident CEOs and their relaxed-and-comfortable management teams noticeably blanche after a dose of reality from their customers and ‘on the ground’ staff.
There are some basic questions and exercises organisations should put their executives through. For example, have they ensured their issues and crisis management communication tools stand up
to this new litigious world of scrutiny and public opprobrium?
Do they have legitimate proof points to back up claims they have listened, changed or taken action? That is to say, have they cut the corporate gibberish?
Rumour and speculation can be just as damaging as proven allegations. Fake news is searchable news. So what is the plan for combatting misinformation campaigns? When algorithms determine
the popularity or relevance of an article (factual or not), how is the hacker hacked?
What the Banking Royal Commission has taught us is that the rules have changed. The battleground for restoring reputations and brand loyalty is not as clear cut. Organisations have to rebuild their communications tool kits and dump banal statements of contrition.
That overused get out of jail card has no currency. Corporations that repeatedly mask greedy, cruel and insensitive behaviour with superficialities will receive commensurate levels of respect, loyalty and regulator scrutiny.
Jacquelynne Willcox is MD of corporate and public affairs agency, Powell Tate.
Maybe they’re just taking a lead from Federal and NSW politicians? It is a nasty surprise to find out what a corrupt place Australia is.
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