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What the Panama Papers leak teaches communicators

13Apr Posted by Jonathan Jordan

The biggest leak of financial data in history – the Panama Papers – has revealed an intricate trail of secret measures that have been used to avoid tax and it’s no surprise that Time Magazine has said this could lead to capitalism’s greatest crisis.  The investigations so far have revealed the hidden finances of presidents, prime ministers and public companies and with 11 million documents under scrutiny, this is only the beginning.

Revelations such as the Panama Papers represent huge reputational challenges for the organisations involved or implicated, as it only adds fuel to the growing trust deficit between society, businesses and government. The perceived or actual breach of trust sits at the heart of every crisis, and the focus has to be communicating the responsible actions being taken to restore trust. Trying to impose your preferred definition on the context and scale of the issue simply doesn’t work anymore, as the Icelandic Prime Minister learned when the public called for his resignation.

To sustain a license to operate, any organisation needs to demonstrate three things: good governance, ethics and transparency.

When attempting to recover quickly from a reputational crisis, organisations also need to remember it’s not someone else’s problem:  you need to own it until you are relieved of that responsibility by regulators, politicians or legal remedy. Trust requires leaders to engage with stakeholders, explain what went wrong and outline the options being considered. To do this well, you need knowledge not only of your organisation, but the broader ecosystem in which you operate. Regulators were once seen as setting the ceiling of responsible action, but increasingly society now sees this as the floor.

Today, stakeholders expect transparency. And if you don’t share information voluntarily, it has an increasing likelihood of becoming public knowledge anyway, as the internet makes it easier for anyone to investigate and share data. This dynamic represents some fundamental challenges, but also opportunities to restore trust and strengthen relationships with your stakeholders.

Likewise, social media shouldn’t be seen as a threat, but as an opportunity which provides organisations with free, real-time insight on what people think. The best crisis plans in the world will never be able to predict the twists and turns of a full-blown media storm, but all stakeholders, be it the media, politicians, regulators and your competitors will converge on these conversations, which you need to be part of.

The good news is that if you do the right thing, restoring trust is possible.  We live in very difficult times and as the major information leaks increase in frequency and strength, it will become harder to ignore the difficult, yet consistent, questions from stakeholders. In this age of hyper-transparency, it’s likely that honesty will become the best policy; it will be imperative for individuals and organisations alike to act with integrity and be prepared to talk about the good, the bad and the ugly. We used to call this leadership; perhaps this is the most important lesson businesses need to learn.

This article originally appeared on Gorkana's website.

The biggest leak of financial data in history – the Panama Papers – has revealed an intricate trail of secret measures that have been used to avoid tax and it’s no surprise that Time Magazine has said this could lead to capitalism’s greatest crisis.  The investigations so far have revealed the hidden finances of presidents, prime ministers and public companies and with 11 million documents under scrutiny, this is only the beginning.

Revelations such as the Panama Papers represent huge reputational challenges for the organisations involved or implicated, as it only adds fuel to the growing trust deficit between society, businesses and government. The perceived or actual breach of trust sits at the heart of every crisis, and the focus has to be communicating the responsible actions being taken to restore trust. Trying to impose your preferred definition on the context and scale of the issue simply doesn’t work anymore, as the Icelandic Prime Minister learned when the public called for his resignation.

To sustain a license to operate, any organisation needs to demonstrate three things: good governance, ethics and transparency.

When attempting to recover quickly from a reputational crisis, organisations also need to remember it’s not someone else’s problem:  you need to own it until you are relieved of that responsibility by regulators, politicians or legal remedy. Trust requires leaders to engage with stakeholders, explain what went wrong and outline the options being considered. To do this well, you need knowledge not only of your organisation, but the broader ecosystem in which you operate. Regulators were once seen as setting the ceiling of responsible action, but increasingly society now sees this as the floor.

Today, stakeholders expect transparency. And if you don’t share information voluntarily, it has an increasing likelihood of becoming public knowledge anyway, as the internet makes it easier for anyone to investigate and share data. This dynamic represents some fundamental challenges, but also opportunities to restore trust and strengthen relationships with your stakeholders.

Likewise, social media shouldn’t be seen as a threat, but as an opportunity which provides organisations with free, real time insight on what people think. The best crisis plans in the world will never be able to predict the twists and turns of a full blown media storm, but all stakeholders, be it the media, politicians, regulators and your competitors will converge on these conversations, which you need to be part of.

The good news is that if you do the right thing, restoring trust is possible.  We live in very difficult times and as the major information leaks increase in frequency and strength, it will become harder to ignore the difficult, yet consistent, questions from stakeholders. In this age of hyper-transparency, it’s likely that honesty will become the best policy; it will be imperative for individuals and organisations alike to act with integrity and be prepared to talk about the good, the bad and the ugly. We used to call this leadership; perhaps this is the most important lesson businesses need to learn.

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