HONG KONG — Companies should not view the reputation risk as a binary choice between taking a stand on issues or staying silent, but consider the materiality of issues and the expectations of stakeholders, attendees at PRovoke Media’s Asia-Pacific Summit heard from a panel on reputation and risk.

Asked whether companies were becoming more willing to speak out on issues, or more cognizant of the risks of remaining silent, Lenovo’s head of communications for Asia Pacific Genevieve Hilton pushed back a little. “I’m not sure that’s the right frame. I don’t think it ever helps any company to be completely silent on any issue.

“It’s rather that it’s a process that happens before an issue gets to that point. It’s understanding the materiality of the issue, having a dialogue with stakeholders and then at some point understanding how it impacts us, the expectations of stakeholders so when the issue comes up in the public consciousness — being ready and being able to say we’ve done our homework and this is our position.”

Addressing the issue of materiality, she explained that she had made the transition a couple of years ago from the chemical industry to the technology industry, and “issues are different. Materiality, what the stakeholders are interested in — production safety versus data privacy — and you need to understand those issues through stakeholder dialogue.”

Penny Davis, brand, customer and corporate affairs director for Bupa, agreed: “I definitely think it’s about materiality and relevance to your staff, your customers and your industry, and when you are a global company you need to have those conversations in your local and regional markets too, because the way issues are seen varies from market to market.”

Having said that, Davis added that an organization’s commitment to purpose could be a determining factor in any decision. “You have to ask yourself if as an organization you are purpose-led, and do you use that purpose to define what you take a position on and how you act in a certain situation. And if you are true to that, there is an authenticity about it that your staff and your customers and your stakeholders are going to buy into.”

Charles Lankester, EVP for global reputation and risk at Ruder Finn, said that his firm had seen an increase in the number of clients emphasizing purpose and speaking out on critical issues. “I think staying silent is more risky now,” he said, citing a Deloitte survey indicating that 72% of employees judge companies on their purpose as much as on any of the more traditional employee priorities.

But he added that advance preparation could help companies that do speak up avoid a lot of potential difficulties. “We advise our clients to think like their potential opponents. So think like an activist, think like a short-seller. Before you get to that binary moment where you get a phone call you might not want, try to have the playbook written in advance. It’s very unusual for something to come completely out of the blue. The word crisis is hugely over-used. It’s typically something that has been visible for many months.

“One thing we recommend is, in any organization, task a smart group of your executives to try to damage the company, from an environmental way, from an IT way, from a reputation way and you’ll be amazed at the value that comes out of that exercise.”

There are other ways in which companies need to be prepared before taking a stand, especially in terms of their own internal processes.

“You have to have your own house in order first, and it has to come back to authenticity,” said Davis. “People will see through you if you make claims that you are not living in practice. If you look at the mental health impact of Covid, for example, you’ve seen a lot of companies talk about it and run beautiful ad campaigns, but if you went and talked to their staff they might not be that generous and might not be that real.

“So we have probably been on the conservative side when it comes to talking about what we do. All it takes is one disgruntled employee to make one anon phone call.”

Of course, some issues pit one group of stakeholders against another, especially if their values are in conflict, and that requires even more nuanced judgment — and the skills of a communication professional.

“You can take a stand on something without being a jerk about it,” said Hilton. “When we have an issue on which people do not agree, we find it can be helpful to get the two groups together. So we had an issue around the built-in camera in our laptops. One group, which was concerned about privacy, was against the camera while another group, gamers for example, said you have to have a camera. We got them together and they came up with a solution, which is a visible shutter that can go across the camera and shut it off.”

Companies also need to be prepared for the fact that taking a stand might come at a price.

Said Hilton: “If you are going to be an activist and take a stand on something you’d better be ready to put your money where your mouth is. But to what extent do you make a symbolic gesture and try to make a big deal out of it, that comes down to the art of the communicator: is the timing right, do we have a friendly journalist who will cover this the way we want it covered, do we think employees are ready to hear this message, or will it be more trouble than it’s worth. Or do you want to keep quiet and wait for it to become an internet meme?”

Lankester, however, argued that in today’s the world, the cost of not addressing critical issues could be higher than the cost of staying silent. “If companies want to be attractive as an investment to institutional investors there are a lot of boxes you need to tick. You have to ask, is our company fit for purpose as far as institutional investors are concerned. Most large corporates want to be considered as a trusted, valuable member of the community. If you’re not in that club, you’re not in that club.”

Still, some companies are more prepared for the challenges of taking a stand than others.

“One of our big jobs in-house is to raise the profile of reputation risk management in general,” said Davis. “People around the table might be aware of it because of previous experience, if they have been through a crisis before. But otherwise, a lot of our time is spent raising the profile of reputation risk, bringing it back to the commercial impact. If you’re not taking a position on an issue that matters to your customers, one of your competitors is.”

For Hilton too, the value of past experience with a crisis is important, and she urged communicators to make sure that crises were seen as learning opportunities. She cited the old adage that one should never let a crisis go to waste: “You can take the opportunity to talk about the processes that allowed a crisis to develop.”

One thing communicators can’t do, however, is turn a CEO who is not naturally interested in activism into an activist CEO.

Said Hilton, “It’s very hard for a CEO to be an activist in a sphere that’s completely unrelated to the business. If that happens, it’s more of a personal choice for the CEO. If your CEO is not an activist, don’t think you can go to her or him and turn them into an activist. It has to be a personal choice.”

She also warned against communicators seeing their role in terms of providing the organization with a conscience: “The communicator’s role is to represent the views of employees and outside stakeholders and to summarize them with data and with examples. But the question of being the conscience is a different question. Is the role of the communicators to be the moral compass of the CEO? I’m not sure that can be the case if the management team doesn’t have a conscience to begin with.”

Davis went further, making it clear that communicators are invited into the decision-making process primarily to help the organization solve its problems: “We are there to solve problems and when a decision is made, whether it’s in line with our personal moral compass or not, it’s our job to work out how to deliver that message in the best possible way for the best possible impact on the company.”

Finally, Lankester summed up the current risk environment for organizations—and an approach that helps them understand and anticipate the challenges: “The outside world is exceptionally important to any organization. We encourage what we call dynamic environment creation—what we used to call scenario planning—that looks at what could go wrong. We find that organizations that have experienced an issue like this are far more engaged than those that have never been through.”