Putting internal communications at the centre of your crisis communications plan

Last week’s FT reports detailing decades of alleged abuse towards female staff and acquaintances by hedge fund boss Crispin Odey felt sadly familiar.

In the wake of allegations of sexual misconduct and rape at the CBI, alongside the Philip Schofield ITV scandal, recent examples of reputational crises with poor employee conduct at their heart are rife.

They provide stark reminders to organisations – and internal communicators – about the importance of listening to their people, not just talking at them.

After the reports surfaced last week, financial institutions Morgan Stanley, Goldman Sachs and JPMorgan announced they were cutting ties with Odey Asset Management (OAM). On Saturday the London investment firm said it had divorced itself from its founder, as it fights a potential exodus of investors. On Thursday this week the firm announced that it is being dismantled, saying it is in advanced discussions to transfer certain funds and employees to rival firms, potentially marking the end of one of London’s oldest hedge funds.

When such crises occur, commentators often forensically examine what is said externally. To the media. To clients. To regulators. All critical, of course. But what is said to the organisation’s employees is arguably even more so.

Part of OAM’s statement last week professed that “in addition to ensuring the wellbeing of all members of staff, OAM’s priority is safeguarding the interests of clients of the firm and our investors.” Although claiming that staff wellbeing is amongst its top priorities might raise eyebrows in the face of accusations that it has wilfully neglected employee wellbeing for two decades, it should certainly be at the top of that list.

Scandals like this can not only cause a sudden exodus of clients, they can expedite a sudden exodus of staff and a vacuum of replacements willing to work in a business that becomes toxic almost overnight.

It appears that OAM may not survive their fight to survive. Had it continued the battle to keep the firm intact, it would not have been easy. If the allegations are to be believed, employees are likely to broadly fall into three camps. Those who were ignorant of the behaviours at play and now feel shocked and betrayed. Those who were aware of rumours or allegations but were too scared to act for fear of retribution. Or those in positions of responsibility who were aware of allegations and failed to act.

All but the most rotten of apples, bent on self-preservation, would have wanted to see some clear actions from their employer.

These might include:

A commitment to act without delay, to not only fully cooperate with the ongoing FCA investigation but to instigate an impartial root and branch review of what has gone wrong and how.

Acknowledgement that the business may have fallen short in some very important areas.

Empathy for any individuals who have been harmed in any way while under their employment. Employees would want to feel that the firm was serious about not only uncovering the truth, but also scrutinising the culture that allowed these allegations to arise, and creating a safe and inclusive workplace that doesn’t tolerate misconduct of this nature.

From an employees’ point of view, denial and obfuscation in such instances would likely upset team members even more, whether allegations are proven or not. Clear and decisive action and commitment to improve, on the other hand, can turn people around.

The biggest challenge for OAM was that senior figures in the business, those who have severed ties with the man whose name is above the door, were not untainted by the allegations. Women speaking to the FT have accused management of complicity; of being aware of allegations for many years and failing to act upon them, even normalising the accused’s behaviour.

Any investigation or review influenced by those who have a vested interest in hiding their own complicity would have had little value in the eyes of external stakeholders, or employees.

The CBI has demonstrated that people can be turned around if a genuine commitment to change is exhibited. While initially slow in its response, its decision to appoint an independent respected law firm, Fox Williams, to conduct a comprehensive review, and subsequently publish its findings in full, was good practice.

Despite losing some high-profile members it has since secured strong support from those remaining, with 93% backing its new reform plans. It has already begun to implement many of Fox Williams’ 34 recommendations.

OAM, had it not taken the decision to split the business up, would have been well advised to follow a similar path. If it had survived the immediate crisis, rebuilding its standing and reputation would have required it to restore faith in its leadership.

To do so amongst employees, businesses in this situation need to accept and follow the recommendations of any independent review quickly, and with humility. From an internal comms point of view they need to keep staff regularly informed about what they are doing to improve their culture and processes, and give them a sense that they are genuinely changing for the better. And they need to begin listening to their employees.

This PRmoment Internal Comms Review is written by Ian Morris, director, communications, SEC Newgate UK.

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