In the News–Reputation Management
Crisis of the Week: Equifax Hit With Massive Reputation Breach
Ben DiPietro, The Wall Street Journal’s Risk & Compliance Journal, September 19, 2017
The hack of personal information of around 143 million people has put credit-monitoring service Equifax Inc. in the crisis bullseye. Hackers swiped Social Security numbers, birth dates, addresses and driver’s license numbers, leaving consumers trying to figure out their next moves—and unhappy with how Equifax was handling the situation. The breach is under investigation by the Federal Bureau of Investigation, Federal Trade Commission and several states.
Equifax issued a statement on Sept. 7 notifying the public about the breach—weeks after it said it first learned of the incursion. It issued ‘updates’ on Sept. 8, Sept. 11, Sept. 13, Sept. 14 and Sept. 15, the last one announcing the retirements of its chief information officer and chief security officer. Bloomberg reported three executives sold stock days after the company learned of the breach but NPR reported Equifax said in a statement not posted on its website the executives “had no knowledge that an intrusion had occurred at the time they sold their shares.” The company’s chief executive, Robert F. Smith, said the incident is “the most humbling moment in our 118-year history” and promised changes.
The experts evaluate how well Equifax has handled its crisis communications.
Davia Temin, chief executive, Temin and Co.: “Just terrible. Equifax’s public response to its breach affecting 143 million Americans remains one of the worst yet, serving only to exacerbate the crisis–and the company took over a month to plan it. It made pretty much every crisis communications gaffe in the book, systematically destroying public trust with every move.
“Equifax completely and purposefully understated the problem. ‘This is clearly a disappointing event for our company…’ the CEO said. Disappointed? Really? What about devastated? What about disconsolate? What about abjectly sorry? Second, it included its marketing brand message in its announcement: ‘We pride ourselves on being a leader in managing and protecting data.’ This set up an internal comparison between what it promises in its marketing and what just happened. ‘Proud?’ It should be ashamed. This simply served to magnify its fail–and the company’s complete cluelessness as to what it was about to unleash.
“The utter stupidity of Equifax appearing to pull a fast one on the American public by tying its acceptance of an offer for a year of free credit monitoring to the waiving of one’s right to a trial and mandating the use of arbitration is stunning. Only after a huge public outcry and the involvement of New York’s and other state’s attorneys general getting involved did it amend the offer to include a ‘write-us-within-30-days-to-opt-out’ clause. No matter what its ‘clarification’ noted, it was far too little, too late. What could have been a one-day killer of an announcement…has turned into a category 5 debacle for Equifax.”
To read the full article, CLICK HERE.
President Trump Cedes Moral Leadership To Big Business
Alexander C. Kaufman, The Huffington Post, August 19, 2017
A deadly attack by an avowed white supremacist shocked the nation. The president’s response came swiftly, and triggered raw emotion. Despite a sometimes strained relationship with the White House, corporate board rooms stayed silent, spared the need to weigh in.
That was 2015.
This week, chief executives at some of the country’s biggest companies tossed out usual protocols and disavowed the sitting commander-in-chief after President Donald Trump refused to single out the white supremacists and neo-Nazis who rallied in Charlottesville, Virginia, last weekend.
Of course, distance from the leader of the ruling political party won’t cost executives their jobs like it might lawmakers facing reelection in an era of hyper partisanship. At a particularly circus-like time in politics, this gives companies the ability to “become the adults in the room,” said Davia Temin, a management coach and reputation consultant who worked with some of the companies whose leaders resigned from Trump’s councils this week.
“Business has a planning and strategic horizon that is further out than four years or eight years or 12 years,” she told HuffPost. “They can actually have a counterpoint and be the counterbalance to the short governance by tweet.” […read more]
CEOs Rethink Alliances With White House
Vanessa Fuhrmans, The Wall Street Journal, August 15, 2017
President Donald Trump’s response to the weekend violence in Charlottesville, Va., has sparked a new round of soul-searching in U.S. corporate boardrooms over whether they should keep working closely with the White House.
On Tuesday, the number of members who have withdrawn from a White House advisory council grew to five, and executives including Wal-Mart Stores Inc. Chief Executive Doug McMillon criticized the president’s initial unwillingness to specifically denounce the racist hate groups that rallied in Charlottesville over the weekend.
The fallout is testing already-tense relations between the White House and corporate executives, many of whom face new pressures from employees, consumers and activists to take stands on social and political issues. At times, those issues have put them in direct opposition with a president whose pro-business agenda they are also seeking to shape.
“This is one of the toughest times for the consciences of corporate boards and corporate CEOs,” said Davia Temin, head of Temin & Co., a reputation and crisis-management consultancy. Ms. Temin said she expects more leaders to resign their advisory posts. […read more]
Three More CEOs Turn Backs on Trump as Merck, Intel Quit Counci
Jeff Green and Jared S. Hopkins, Bloomberg, August 15, 2017
Could America’s first CEO president lose America’s CEOs?
It was a question that came to the fore again Monday when first Merck & Co.’s Kenneth Frazier, then Under Armour Inc.’s Kevin Plank and Intel Corp.’s Brian Krzanich stepped down from a White House business group set up to advise Donald Trump.
While none mentioned the president, Frazier, one of the country’s most-prominent black chief executive officers, quit the council as Trump was being assailed for failing to quickly condemn white supremacists for deadly violence at a rally Saturday in Charlottesville, Virginia. Frazier said he was acting on a “matter of personal conscience.”
Frazier and his compatriots joined the ranks of Elon Musk of Tesla Inc., Bob Iger of Walt Disney Co. and Travis Kalanick of Uber Technologies Inc. — executives who walked away from business panels Trump touted, taking the unusual steps of publicly distancing themselves from a sitting president.
Who’s next? That’s the big debate, said Davia Temin, head of the New York-based crisis-management firm Temin & Co. “This conversation is viral in boardrooms right now.” […read more]
CEO Health: Shareholders Want to Know More
Lindsay Frost, Agenda, June 26, 2017
Newly minted CSX CEO Hunter Harrison is lauded as transforming the railroad game for Canadian Pacific and several other railroad networks. Although he took his post at CSX in March, investors were tasked with ratifying the $84 million pay package it would take to keep him. While considering the vote, shareholders voiced concerns about his health after a report was leaked noting that he has to work from home sometimes and uses an oxygen tank to help him breathe.
Harrison’s situation has put the question of materiality, and when and if to disclose CEO health issues, back in the spotlight. Considered the board’s responsibility, making health disclosures can be a difficult decision depending on the situation, sources say.
“[When boards are considering disclosing], they are caught in this world between privacy and HIPAA [Health Insurance Portability and Accountability Act of 1996] and material information,” says Davia Temin, CEO of strategy and communications consulting firm Temin and Company, who has served on multiple boards. “Clearly shareholders and analysts want the information immediately, and very often CEOs who are ill want more time [before disclosing]. Different companies have threaded the needle differently and walked that thin line differently.” Subscription required for full access. […read more]
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Crisis of the Week: Fujifilm Addresses Accounting Problems
Ben DiPietro, The Wall Street Journal’s Risk & Compliance Journal, June 19, 2017
Fujifilm Holdings announced that losses from accounting irregularities in New Zealand were much larger than first thought and extended to the company’s Australian office-equipment unit. The announcement left some to wonder how much control the company has over its overseas units.
The company said it conducted a review and found the losses would widen further but did say it found “a problem” with controls at its Fuji Xerox subsidiary. Fujifilm said inappropriate accounting occurred in part because of commission and bonus “incentives” for managers and employees that “placed an emphasis on sales.” It said six board members at Fuji Xerox would resign to take responsibility for the losses that now total around $340 million. It also docked the pay of all Fuji Xerox board members and two other senior executives.
Using Fujifilm’s statements and those of its executives, the experts break down the company’s crisis management performance in this instance.
“Fujifilm’s public response to its ‘inappropriate accounting’ crisis was enough to be effective as witnessed by the fact the story lasted no more than a few days in the global news cycle,” said Davia Temin. “While the company’s public responses were terse, minimal and occasionally odd, they were unprecedented in their openness and disclosure.” […read more]
Navigating the United PR crisis
Amara Walker, CNNi, April 11, 2017
Amara Walker talks with public relations expert Davia Temin about United Airline’s handling of their latest crisis that sparked worldwide outrage, in which a passenger was dragged off the airline when he wouldn’t give up his seat on an overbooked flight, and how they can recover from the blow to their reputation.
To watch the interview on CNN, CLICK HERE.
PR Nightmares: United Fiasco Among Worst Corporate Gaffes
Christopher Palmeri and Jeff Green, Bloomberg, April 11, 2017
When it comes to bad public relations, it’s pretty tough to top the sight of a United Airlines passenger being dragged, bloodied and screaming, from a flight.
The incident, including two attempts at apology by Chief Executive Officer Oscar Munoz, has been airing on cable TV and raging on social media for days. But the fiasco is hardly the first self-inflicted corporate blunder. Munoz can take comfort that it’s happened to others, and in many cases the bosses didn’t lose their jobs, as our PR Tales From Hell illustrate.
Over Easter week in 2009, two Domino’s Pizza employees in North Carolina posted a video on YouTube showing one sticking cheese up his nose and pretending to sneeze on a customer’s sandwich. With the clip reaching one million views, management fired the employees, sanitized the store and produced its own video with a formal apology from President Patrick Doyle.
The company’s response was to show outrage and take action, said Davia Temin, head of the New York-based crisis-management firm Temin & Co. CEO David Brandon kept his job and now runs Toys “R” Us Inc. Doyle succeeded him. […read more]
Crisis of the Week: Hacked Twitter Account Gives McDonald’s Indigestion
Ben DiPietro, The Wall Street Journal’s Risk & Compliance Journal, March 27, 2017
The crisis magnifying lens puts it focus on McDonald’s Corp. after a message was sent on the company’s Twitter account calling President Donald Trump “a disgusting excuse of a President” and trolling him by saying he has “tiny hands.” The White House did not comment, but some supporters of the president called for a boycott of the burger chain.
McDonald’s said it was notified by Twitter that its account was hacked. McDonald’s deleted the tweet, secured its account and said an internal investigation found the account had been hacked by “an external source.” The company put out a statement apologizing that “this tweet was sent through our corporate McDonald’s account.”
The experts evaluate how well McDonald’s handled this crisis.
“The fake tweet sent from McDonalds’ Twitter account on March 16 that disparaged President Donald Trump catapulted the company into the land of alt-tweetdom,” said Davia Temin. “Today, as companies and individuals alike struggle to delineate truth from fiction in public discourse, McDonalds had an immediate imperative to let the public know it had not officially sent the insulting tweet. It had to act quickly to set the record straight, before it even knew what really had happened. It couldn’t let a lie stand. It did an excellent job.” […read more]
Rex Tillerson Isn’t the Only CEO With an Extra Email Address
Vanessa Fuhrmans and Joann Lublin, The Wall Street Journal, March 15, 2017
The news that Secretary of State Rex Tillerson used an email alias while he was chief executive of Exxon Mobil Corp. surprised much of the business world—if only for his moniker’s creativity.
Many executives have an alternate company email address, or even two or three, business leaders and executive coaches say. But it is rare that those aliases take on an entirely different identity.
There is a distinction between using an alternate email address and adopting an alter ego, said Davia Temin, chief executive of reputation- and crisis-management firm Temin & Co., who says such an alias is often an attempt to maintain privacy “in such a porous world.” She advises against the urge. Even if messages from the alternate address circulate solely among company executives, “it looks as if it is meant to hide” something, she said.
More common, Ms. Temin says, is for executives to set up a social-media alias to join a Twitter conversation or other debate without disclosing their identities. […read more]
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