Companies and other organizations must constantly be prepared to respond to threats to their integrity, and, thus, their reputation. The consequences for erring in response to such threats can be fatal to an otherwise successful organization. Even if not fatal, reputational threats harm a company’s value in countless economic and noneconomic ways. This is especially true today, where social media and the 24-hour news cycle sensationalizes stories, and public opinion often turns on the content of 140 (now 280) characters. In this environment, companies and other complex organizations, through their senior executives and boards of directors, must be ready to respond to threats in ways that will protect the organization but also are true to the organization’s values. Put another way, organization’s must respond with integrity.

Why Prepare for Reputational Threats?

Since at least the sixteenth century, it has been said that practice makes perfect. The adage holds true in preparing to deal with reputational threats. Just like companies prepare for other disasters today—from strikes to natural disasters to cyberattacks—companies should prepare (and practice) for how they would respond to reputational threats. There are many reasons for this, but here are the top four:

  • First, reputational threats can be extraordinarily harmful to an organization. Imagine the possible outcome to a pharmaceutical manufacturer, for example, if word of lax patient safety practices swirled around the internet. Consumers may stop purchasing products, putting the entire business at risk. Companies must be prepared swiftly to mitigate these threats at the moment they emerge.
  • Second, reputational threats can take many forms. Some stem from questions about safety (as in the above example) while others may emerge out of alleged fraudulent financial practices, a #MeToo-type allegation, crimes and civil frauds, and a host of other real or perceived misconduct. While effective responses to reputational threats often require specific tactics aligned with the nature of the specific threat, general response processes—including an emphasis on corporate values—provide critical guides.
  • Third, reputational threats can occur without notice and spiral quickly. Many, like a news story, a tweet, or some other posting, can go viral in minutes, limiting the amount of time an organization has to respond. Given the intricacies corporations face in reaching senior leaders and, where appropriate, board members, to plan a response, there is never time to craft a strategy from scratch. Rather, companies need already to have a baseline on how they will process and handle such threats and responses quickly.
  • Fourth, reasonable minds can differ on how an organization might respond in these circumstances. Different executives and board members may prefer different approaches to responding to reputational threats. Some individuals prefer an aggressive denial, while others gravitate toward a wait-and-see approach. Either of these approaches may be appropriate depending upon the threat. Rehearsing how to resolve differences of opinion—and what value to emphasize in responding to a threat—may make settling on a response less contentious and more timely.

How to Prepare for Reputational Threats?