Fighting back from reputation scandals, particularly around compliance, is extremely difficult and costly. Consider how long will it take for the public to trust Volkswagen again? Months? Years even?
At Alton Towers, the devastating accident last year has cost their owners, Merlin Attractions Operations Ltd, over £40Million. Yet the true cost in reputation is still to be seen.
In the trial, Merlin admitted health and safety breaches, and one victim commented that “staff looked like they hadn’t been trained”. It’s sad to think that such a tragedy could be avoided or eased with the right training.
The cause of an incident doesn’t even need to come from within. Third party suppliers and contractors trading under your name or reputation can also cause a direct negative effect if their practices put you in the spotlight.
In August this year news broke that Airbus is under investigation by the Serious Fraud Office over alleged corruption, bribery, and fraud in connection with the use of third party consultants.
Airbus’s own website states:
One of the most valuable assets to Airbus is its reputation. Consequently, each and every employee is committed to defending high ethical standards in business relations both inside the company and out.
But what about the standards of its third party contractors? Apart from a freeze of finance from its credit agencies while the investigation continues, it is not yet known what impact this will have on Airbus, however it is likely to be costly in the end.
Another example of organisational trust and reputation being tainted by its suppliers and partners is Thomas Cook. Regardless of the fact that it was the errors of their third party supplier hotel, owned by Louis Group, that lead to the deaths of Bobby and Christi Shepherd in 2006, the public outcry and subsequent boycott of Thomas Cook after the inquest in 2015 meant that the shockwaves of the incident will potentially be felt by Thomas Cook – for years to come.
Those at the top of organisations such as these must be accountable for the procedures and processes that they put in place, and it is solely their responsibility to ensure that those procedures are being followed.
This process does not need to be onerous though. The best approach is to ensure staff and contractors are engaged in your organisational beliefs, and that policies are brought to life through training, reinforcement, verification, assessment and testing. Building, managing and maintaining a culture of compliance should be something that every organisation strives for and ultimately achieves.
Whether it’s employees adhering to security policies, changes in legislation, data protection, health and safety, ethics and integrity, recruitment policies or equality and diversity; all these and more can negatively affect your organisation if not followed by employees and contractors. Additionally, key skills need to be up to date and managers should have visibility of the compliance of their teams at all time. Overall, identifying areas of risk within training and compliance, and investing in processes and systems to offset them is the clearest way for organisations to take control around risk compliance.