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Copyright (c) 2010 Peg Jackson
Technology and Cyber Risk
The nonprofit in this story is a household name because of its environmental work. Its website led the viewer through all the various programs and services that it had to offer. It even had a link for individuals to make donations.
The development director and the technology director were shocked to discover that a porn site was soliciting donations for the nonprofit through a link in the porn sites web page. Viewers of the porn site...
Reputational Risks in Your Organization - Part 7
Copyright (c) 2010 Peg Jackson
Nature of the Organization's Business Operations
Whether an organization manufactures goods, provides services or acts as a distribution channel, the nature of its operations can present exposure to reputational risk. Companies that manufacture food, pharmaceuticals, chemicals, petroleum products or other items that are either perishable, fragile in terms of shelf life, or pose a potential safety risk can experience reputational crises when the products they...
Reputational Risks in Your Organization - Part 6
Copyright (c) 2010 Peg Jackson
Why Individuals Are Reluctant to Blow the Whistle On Waste, Fraud and Abuse
Everyone knows that whistle blowing is often viewed as a career limiting gesture, despite the fact that federal law prohibits retaliation. Whistleblowers are not universally embraced by management in any organization. Often they are described as not a team player or are categorized as troublemakers. Management can use tactics such as rumor and innuendo to make the whistleblower look...
Reputational Risks in Your Organization - Part 11
Copyright (c) 2010 Peg Jackson
Vendors and Outsourcing
All organizations deal with vendors for some form of product or service needed to operate. Outsourcing has become an efficient method of dealing with necessary functions that would be too costly to maintain in-house. The use of vendors and outsourcing has potential for creating reputational problems if employees engage in illegal or unethical transactions such as kick-backs or arranging to have the vendor or outsource organization...
Reputational Risks in Your Organization - Part 10
Copyright (c) 2010 Peg Jackson
Technology Policy
If your organization does not already have a technology policy - you need one now. All employees, from the CEO to the newest employee, must be required to read and sign your organization's technology policy. Your organization's technology policy should have these talking points:
- Clearly state that all of the organization's technology belongs to the organization. There are NO expectations of personal privacy when using the organization's...
Reputational Risks in Your Organization - Part 4
Copyright (c) 2010 Peg Jackson
FRAUD
Fraud can be one of the most destructive sources of reputational damage. Fraud and fraudulent activities do not simply happen overnight and can seriously injure your organization's reputation because the fraud points to defective internal controls. Fraudulent activities can attract the attention of the media, law enforcement and regulators. Potential clients, shareholders and associates read these reports and could become disenchanted with your...
The Lessons Learned From Profiled Reputational Crises
Copyright (c) 2010 Peg Jackson
The examples of reputational crises presented in the prior five articles illustrate the degree to which a crisis scenario can skyrocket into national news.
The organizations profiled varied dramatically in their responses to the crises. Some organizations, such as Virginia Tech, survived and went on to champion changes in dealing with workplace violence within their own industry academia. Others, such as Arthur Andersen, imploded in a puff of smoke. No...
Reputational Crises Profiled - Part 2
Copyright (c) 2010 Peg Jackson
Domino's Pizza
- The nature of the crisis.
Two employees of a Domino's Pizza franchise filmed an unsanitary preparation of a pizza violating other health-code standards while a fellow employee provided narration and posted it online.
The two were charged with delivering prohibited foods and with Domino's Pizza Corporate faced a public relations crisis as more than a million people viewed the video on YouTube. References to it were in five of the 12 results...
Reputational Risks in Your Organization - Part 5
Copyright (c) 2010 Peg Jackson
Portals to Fraudulent Behavior
People who engage in fraudulent behavior look to find the easiest targets within an organization. Some examples of portals to fraud include:
Travel claims.
Travel claims not processed in a consistent manner.
Reimbursements subject to arbitrary measures.
Senior management not required to provide the same level of documentation for a reimbursement claim as would a member of the rank and file.
Unauthorized use of debit/credit...
Reputational Risks in Your Organization - Part 8
Copyright (c) 2010 Peg Jackson
Relations with the Community
Organizations need to live and work harmoniously in their communities. Today's business and community environments can also contain individuals or groups that have their own political agenda which may not include living harmoniously with your organization. The actions of people and groups who might politically target your organization could also damage your brand and image.
Private sector firms such as Chiron and university...
The Role of Organizational Culture in Reputational Risk
Copyright (c) 2010 Peg Jackson
A recurring theme in our discussion of the sources of reputational risk will be the contribution of the organizations culture to the event that triggers the reputational crisis.
In virtually every example of a reputational crisis there is a connection to an element in the organizations culture. Sometimes it will be a level of dysfunction that is so high that it borders on toxic. Other examples will present an organizational culture that is stuck in a time warp....
Role of Organizational Culture and Citizenship in Reputational Risk
Copyright (c) 2010 Peg Jackson
Learning to understand an organization's culture is much like peeling an onion. There are layers upon layers to peel back.
Organization's are not just the people that populate them, although the people are the face of an organization. From deep within organization's come the rules written and unwritten about how things are done, how problems are solved, and what is valuable. The unwritten rules exist because either everyone agrees with them, or everyone feels...
Reputational Risks In Your Organization - Part 1
Copyright (c) 2010 Peg Jackson
Being pro-active about reputational risk vulnerabilities will not guarantee that organization will be exempt from adverse incidents. However, being pro-active about reputational risk vulnerabilities will give the organization a head start in preparing to deal confidently with these occurrences.
Begin by identifying those areas of your organization's organization, structure, governance, management and operations that could trigger a reputational crisis. By...
Reputational Risks In Your Organization - Part 3
Copyright (c) 2010 Peg Jackson
Human Resources
The Human Resources division of any organization is tasked with administering and enforcing a myriad of policies and protocols. Employees are provided with their first understanding of the organizational culture by means of their interaction with HR.
Some common problem areas include:
Dysfunctional hiring, supervisory and termination practices.
Hiring employees is a tricky business in today's environment. When incidents of fraud or criminal...
Reputational Crises Profiled - Part 4
Copyright (c) 2010 Peg Jackson
American Red Cross
- The nature of the crisis.
Following the September 11 attacks on New York and Washington, the American Red Cross, ARC, launched a phenomenally successful fundraising drive. The Red Cross claimed that all of the monetary donations were going to be used to assist the surviving families of people who were killed in the attacks. The Red Cross President, Dr. Bernadine Healy, established the Liberty Fund to consolidate these donations.
The...
Reputational Crises Profiled - Part 5
Copyright (c) 2010 Peg Jackson
Virginia Polytechnic Institute and State University Virginia Tech
- The nature of the crisis.
On April 16, 2007 a deranged student shot and killed 32 students and faculty members on the Virginia Tech campus. The student, Seung Hui Cho, shot and killed two students in a dorm and then went on to a classroom building where he gunned down 30 students and faculty in one of the most horrific incidents in history. .
- The quality of the response.
The campus...
Reputational Risks In Your Organization - Part 2
Copyright (c) 2010 Peg Jackson
Checklist For Governance and Management
* Are board members furnished with financial statements and other materials well in advance of the board meetings?
* Is an agenda prepared and followed for each board meeting?
* Are minutes kept for each board meeting? * Do board members come to the meetings prepared to discuss the issues on the agenda?
* Is there a specific decision-making process, i.e., specific length of time for discussion followed by a vote?
* If...
Reputational Crises Profiled - Part 3
Copyright (c) 2010 Peg Jackson
Association of Community Organizations for Reform Now ACORN
- The nature of the crisis.
This grassroots nonprofit organization has been plagued by allegations of voter registration fraud, embezzlement. In the summer of 2009 two filmmakers posing as a pimp and prostitute secretly videotaped ACORN employees in four of the agency's offices suggesting or condoning a series of illicit actions as the couple sought advice on setting up a brothel with underage women....
A Reputational Crisis Will Never Happen To Us!
Copyright (c) 2010 Peg Jackson
Does your company, organization, leader, ever say the following?
- We do not need to do things like a business. We are a nonprofit serving poor people.
- No one would investigate us, sue us, or arrest any of our people for embezzlement, workplace violence or some other action.
- We are a university - we do not have to do all of the things that corporations are expected to do.
- We work too long and hard as it is. We are not going to do more work.
- Our...
Reputational Crises Profiled - Part 1
Copyright (c) 2010 Peg Jackson
The discussion of each crisis will briefly summarize:
* The nature of the crisis.
* The quality of the response. * What were the results?
* What were some of the underlying issues that triggered the crisis?
* What can your organization learn from these reputational crises?
The organizations chosen as examples vary widely in terms of size, mission and industry. What they all have in common is the reputational aspects of the crises they encountered and...
Reputational Risk Management
Copyright (c) 2010 Peg Jackson
No organization ever envisions being embroiled in a crisis or scandal that will forever alter its good name and reputation. Generally these events come as a bolt out of the blue. The damage is not simply confined to a product or some fleeting adverse publicity. There is real damage, probably permanent damage, to the company, nonprofit or academic institutions name, reputation, public trust and brand image.
This is the type of catastrophe that is the worst...
Reputational Crises and Organizational Culture
Copyright (c) 2010 Peg Jackson
Reputational crises frequently emerge from dysfunctional organizational cultures. Long before a reputational crisis appears, the seeds for the crisis have been sown and cultivated deep within the organizations culture.
So what is organizational culture?
Organizational culture is a system of shared basic assumptions that helps people within the organization to cope with external forces, solve problems and pass along the learned methods for dealing with...
Knowledge is Power!
Copyright (c) 2010 Peg Jackson
Learn about Common Sources of Reputational Damage
Every business, nonprofit, or academic organization has the potential to be exposed to situations that can generate adverse publicity and result in damage to their reputation, brand and image.
The headlines say it all:
Peanut Company Execs Refuse To Answer Lawmakers
Questions.
Peanut Corporation of America
More pet deaths expected in tainted pet food disaster menu foods
Frys exec dropped millions on...
Lessons Learned from Responses to Reputational Crises
Copyright (c) 2010 Peg Jackson
Hurricane Katrina became legendary not just because of the catastrophic damage this storm caused to New Orleans and the surrounding area. The federal, state, local and nonprofit response in the aftermath of destruction exposed shocking gaps in this countries emergency preparedness and, some might argue, in the integrity of some of the responding organizations.
One of the most telling examples of ongoing reputational damage is the Federal Emergency Management...
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