Lawyers as scapegoats
Column Defensive corporate communication is often justified on legal grounds. A lazy and sometimes fatal excuse.
Column Defensive corporate communication is often justified on legal grounds. A lazy and sometimes fatal excuse." A panel discussion on the question "Priority of law or priority of communication?" recently took place in Winterthur as part of the "Executive MBA Marketing" program. The focus was on differences of opinion between lawyers and communication experts, particularly in crisis situations. The most frequently mentioned case on the podium was, of course, that of the temporary employment agency Adecco, where the Board of Directors launched an investigation in 2004 due to suspected accounting deficiencies and then went into hiding. As a result, unsettled investors destroyed five billion dollars worth of Adecco capital within a few days. Quite unnecessarily, as it turned out, because the investigation revealed no irregularities whatsoever, for which it would be wrong to blame the lawyers who had advised the Board of Directors to temporarily "omerta". After all, it is in the nature of things that lawyers plead for the most defensive communication possible in critical cases. They are guided in their assessment of the situation by the presumption of innocence, a cornerstone of our legal system.
Unfortunately, the "real world" in which we communicate no longer has much to do with this principle. In the public eye today, the presumption of guilt rather than innocence applies. The media do not usually publish and pass judgment "in dubio pro reo", but follow the adage "where there is smoke, there is bound to be fire".
A CEO accused of sexual harassment, for example, may be legally innocent until proven otherwise. But if he becomes the subject of headlines, he is usually finished long before the investigation is completed and completely regardless of the outcome. The fact that this makes companies and their exponents vulnerable to blackmail is deplorable, but ultimately a fact of life. The most recent example of this is the recent resignation of UN refugee commissioner Ruud Lubers, who was confronted with allegations of sexual harassment.
Even when top managers actually make mistakes, lawyers and communication experts are divided on how to deal with them - which is also completely normal. Lawyers always have a possible lawsuit in mind in such cases. And they fear that their client's position in court will deteriorate if he openly admits his guilt. Communications consultants, on the other hand, know that in the case of serious mistakes, only an unapologetic admission, and possibly even an apology, can help to avert or at least reduce the damage to the company's reputation.
Nevertheless, both lawyers and PR professionals are needed in crisis communication cases. Listed companies in particular operate today in an environment characterized by legal requirements and litigious investors. It would be irresponsible to forego legal advice here, as one wrong word can often lead to multimillion-dollar claims for damages.
However, the future and value of a company depend not only on compliance with stock market regulations, but also on the expectations of the public. And this follows the laws of the media. This is why management and boards of directors must take both into account in their decisions: the legal risks and just as much the reputational risks.
This brings us to the key point: it's all about decision-making. The Code of Obligations leaves nothing to be desired in terms of clarity here: the operational management of a company is the responsibility of the Executive Board, and supervision is the responsibility of the Board of Directors. In other words, not the lawyers and not the communications consultants.
In the case of those in positions of responsibility such as those at Adecco, who justified their silence with advice from lawyers, there is therefore only one thing for the shareholders to do: vote them out immediately. Firstly, because they have not fulfilled their duties under the Swiss Code of Obligations. Secondly, anyone who tries to pass the buck in such a cheap way does not belong on a Board of Directors. And thirdly, they have not understood that in addition to the legal analysis of the situation, today's corporate governance also includes an assessment from a communications perspective.
> Sacha Wigdorovits is head of the Zurich-based communications agency
Contract Media.
Unfortunately, the "real world" in which we communicate no longer has much to do with this principle. In the public eye today, the presumption of guilt rather than innocence applies. The media do not usually publish and pass judgment "in dubio pro reo", but follow the adage "where there is smoke, there is bound to be fire".
A CEO accused of sexual harassment, for example, may be legally innocent until proven otherwise. But if he becomes the subject of headlines, he is usually finished long before the investigation is completed and completely regardless of the outcome. The fact that this makes companies and their exponents vulnerable to blackmail is deplorable, but ultimately a fact of life. The most recent example of this is the recent resignation of UN refugee commissioner Ruud Lubers, who was confronted with allegations of sexual harassment.
Even when top managers actually make mistakes, lawyers and communication experts are divided on how to deal with them - which is also completely normal. Lawyers always have a possible lawsuit in mind in such cases. And they fear that their client's position in court will deteriorate if he openly admits his guilt. Communications consultants, on the other hand, know that in the case of serious mistakes, only an unapologetic admission, and possibly even an apology, can help to avert or at least reduce the damage to the company's reputation.
Nevertheless, both lawyers and PR professionals are needed in crisis communication cases. Listed companies in particular operate today in an environment characterized by legal requirements and litigious investors. It would be irresponsible to forego legal advice here, as one wrong word can often lead to multimillion-dollar claims for damages.
However, the future and value of a company depend not only on compliance with stock market regulations, but also on the expectations of the public. And this follows the laws of the media. This is why management and boards of directors must take both into account in their decisions: the legal risks and just as much the reputational risks.
This brings us to the key point: it's all about decision-making. The Code of Obligations leaves nothing to be desired in terms of clarity here: the operational management of a company is the responsibility of the Executive Board, and supervision is the responsibility of the Board of Directors. In other words, not the lawyers and not the communications consultants.
In the case of those in positions of responsibility such as those at Adecco, who justified their silence with advice from lawyers, there is therefore only one thing for the shareholders to do: vote them out immediately. Firstly, because they have not fulfilled their duties under the Swiss Code of Obligations. Secondly, anyone who tries to pass the buck in such a cheap way does not belong on a Board of Directors. And thirdly, they have not understood that in addition to the legal analysis of the situation, today's corporate governance also includes an assessment from a communications perspective.
> Sacha Wigdorovits is head of the Zurich-based communications agency
Contract Media.
