The CFO of your financial services firm has just been accused by the Securities and Exchange Commission of embezzlement, you have an earnings call with analysts in a few days, and reporters are burning up your phone line looking for a comment. Unless you address the issue with the media now, the earnings call will be consumed questions of whether client money was stolen.
It doesn’t take a rocket scientist to know what the questions will be, or that reporters will want a substantive answer before they move on to a new topic.
You could first try the non-denial denial (NDD), but any reporter or consumer paying a modicum of attention to what you’re saying will see right through it. The NDD didn’t work too well when Bill O’Reilly tried it after the news broke of the $13-million in settlements the Fox network had paid to women alleging O’Reilly sexual harassed them.
“Just like other prominent and controversial people, I am vulnerable to lawsuits from individuals who want me to pay them to avoid negative publicity,” said O’Reilly in response to the landslide of criticism.
And sure, you could pull a President Trump and use your bully pulpit in refusing to answer the question, but let’s just say the optics wouldn’t be the best. Would that stance be doing your company reputation any favors? And would the questions on the topic ever stop?
No and No.
Along with the reputational aspect, there’s also the consumer confidence component – both of which are affected by the how your PR team mobilizes and responds. Recent messaging ineptitude has wreaked havoc (See United passenger pulled off the plane) in the mainstream and social media. Your company already has a big problem at the top with these embezzlement accusations – why make them worse?
Prepare and Pivot.
It’s all about the messaging. Come up with an answer that acknowledges the transgression but allows you to move on with your integrity intact. So often, it’s the Public Relations department that is the conscience of a company, the very people reporters can depend on for facts. Don’t disappoint – give reporters what they expect, but be judicious in your approach.
Here’s how you might handle the embezzlement question:
Q: What can you tell us about CFO Smith who’s been accused by the SEC of stealing roughly $100,000 from client accounts over the last two years?
A: We are cooperating with federal authorities in their investigation of alleged fiduciary irregularities; CFO Smith has been suspended pending the outcome. We are saddened that something like this may have occurred and are committed to not only getting to the bottom of what happened, but ridding the company of anyone who violated our high standards. These accusations have cast a dark cloud over everyone who works here and we will do everything we can to regain the confidence of those who put their trust, and money, in our care.
Your statement acknowledges the elephant in the room, tells the world you’re not stonewalling the Feds, answers the question about the status of your CFO, makes clear that if he’s guilty he’s gone, and turns the page toward the future where the consumer’s best interests will be a focal point.
As the interview continues, your talking points of cooperation, condemnation and restoring consumer confidence are your friends, so keep going back to them.
An approach like this could go a long way towards putting the fire out and limiting this to a one or two-day story. Yes, it will hurt, much like a bandage can when it’s ripped off, but then the pain is gone and the healing of your company’s reputation can begin.
