Should brands avoid getting involved in issues and taking a stand?
It is a question increasingly being asked amid accusations of posturing for profit and virtue signalling.
And a recent story that has received plenty of attention has brought it to the forefront again.
While much of Europe has been affected by soaring temperatures and wildfires led to holidaymakers being evacuated in some countries, the banking affairs of a former MEP have gripped UK headlines.
The decision by Coutts to close Nigel Farage’s bank account has placed it in crisis media management mode.
And triggered a new debate around ‘woke’ brands.
When the story first broke, it was reported Mr Farage no longer met the wealth threshold for the exclusive bank and that he was subsequently offered an account with NatWest – which owns Coutts - instead.
But the story took another twist when he used a subject access request to find that the 331-year-old bank had compiled a 40-page dossier about him and his views.
The document – compiled by its wealth and reputational risk committee - accused him of being a “disingenuous grifter” and claimed he promoted “xenophobic, chauvinistic and racist views”. There is some irony in the fact that those in charge of assessing reputation risk have ultimately caused a reputation crisis.
After interventions from the Prime Minister and other senior politicians, Coutts apologised. And Dame Alison Rose, the NatWest boss, wrote to Mr Farage saying Coutts’ policy was not to close an account because of someone’s “legally held political and personal views.”
But the story rumbled on.
And Dame Alison quit after admitting she had been the source of an initial inaccurate story about Mr Farage’s finances, something she described as a “serious error of judgement”.
Her resignation was quickly followed by that of Peter Flavel, the CEO of Coutts.
The affair has been described as a “monumental PR disaster”. And it would be hard to argue against that assessment.
There are plenty of crisis communication lessons to learn around speed of response – the narrative was controlled by Mr Farage from the start, with days passing before the bank responded.
It is also a reminder that honesty is a much better policy than attempted cover-ups. If what you said in the initial stages of a crisis turns out to be incorrect, it will only intensify and be prolonged.
And the same can be said for the continual drip feed of bad news – the details of Dame Alison being the source in the initial story emerged a long time after the crisis started.
It also emphasises the importance of comms people having a seat at the top table. Someone from a comms background would surely have identified that Mr Farage is skilled at gaining publicity.
We’ve all been told leave means leave. But Mr Farage was never going to exit quietly, and it was predictable he would use every possible trick – including subject access requests – to make his case.
Quite how the bank rebuilds its reputation now is a tricky question. How many of its exclusive customers are wondering if its risk assessors have compiled similar dossiers about their views?
But there is another part to this crisis.
The story has placed Coutts at the centre of the debate around culture wars and ‘wokeism’.
As unlikely as it may have seemed just a few weeks ago, the bank of choice of the Royal Family is now facing the same criticism as Bud Light, Disney and Ben & Jerry’s ice cream.
Here’s what Piers Morgan, a Coutts customer, said on his Talk TV programme about ‘woke companies pushing an agenda’.
“At some recent point in history, companies lost interest in selling things and decided it was their duty to change the way you and I think.
“Someone somewhere said, ‘corporate board members of the world unite’, and suddenly the people who sell you fizzy drinks and credit cards were also telling you that black lives matter, that Pride month is more important than Christmas and that you are personally to blame for climate change because of your filthy carbon footprint.”
He added: “This woke stuff is insane, and everyone is getting sick and tired of it. Not least sick and tired of woke companies telling us every day we are evil until we can prove otherwise.
“I just want to buy an ice cream without dismantling the patriarchy – whatever that is.”
Bud Light was featured in one of our crisis communication blogs earlier this year as the backlash grew over its decision to work with trans influencer Dylan Mulvaney on a series of social media posts. That partnership has seen Anheuser-Busch, the beer’s maker, lose $27 billion in market value.
DIY brand Wickes made headlines after its chief operating officer said shoppers with trans-critical views were “bigots” and were not welcome in the company’s stores.
The Walt Disney Company is reportedly looking at an almost $900 million loss following a series of ‘woke flops at the box office’ and its ‘diverse’ Snow White remake has been the centre of much debate.
You may also remember that Unilever was criticised last year for the focus some of its brands place on sustainability issues.
Terry Smith, founder of Fundsmith Equity Fund, called the policy “ludicrous” and singled out Ben and Jerry’s ice cream and Hellmann’s mayonnaise as examples of the flaws he feels exist in the approach.
“A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot,” he said.
The Mail on Sunday, which appears to be leading the ‘war on woke’, ran a ‘Woke List 2023’ this weekend, which included people from business, banking, law, the civil service and even the church.
Some might say being on the Mail on Sunday’s Woke List is far lovelier than being on the Rich List. Badge of honour? pic.twitter.com/a859aoM79G
— David Yelland (@davidyelland) July 30, 2023
So, is it ‘go woke, go broke’ or ‘go woke or go broke’?
A new app may shine some more light on that question.
Veebs allows shoppers in America to assess the views of a company before they buy its products.
Scan the barcode, and the app tells you whether the company behind the product have waded into controversial issues.
It is designed to help shoppers know what values a brand promotes or supports before buying a product.
But it has been seized upon by conservatives as a way of avoiding woke companies.
Veebs CEO Chris Rhodes said: “Yes, we've seen the app called the 'anti-woke' app, but it is true that it is actually set up to help empower left-leaning consumers as well.
Want to make woke companies go broke? New app ranks how left-wing your favourite products secretly are Daily Mail
Conservatives have a new way of avoiding 'woke' companies Newsweek
So, should brands avoid getting involved in issues and taking a stand? Do we need them to become our moral guardians? Is it just a trendy bandwagon?
The short answer is they should continue to highlight relevant causes.
Despite the noise surrounding the debate, evidence suggests people want brands to have societal involvement.
The 2023 Edelman Trust Barometer, which revealed businesses are regarded as considerably more competent and ethical than government, shows 63 per cent of respondents buy or advocate brands based on their beliefs and values.
It also reveals people want more societal engagement from businesses on issues like climate change and economic inequality. And they want CEOs to take a public stand on these topics and discrimination, immigration, and treatment of employees.
Richard Edelman, CEO of Edelman, said: “The increased perception of business as ethical brings with it higher than ever expectations of CEOs to be a leading voice on societal issues.
“By a six-to-one margin, on average, respondents want more societal involvement by business on issues such as climate change, economic inequality, and workforce reskilling.
“But business must tread carefully, more than half (52 per cent) of our respondents do not believe business can avoid being politicised when it addresses contentious societal issues.”
And that’s the issue. Taking a stand comes with risks in a polarised world.
So, taking a position on the issues impacting society should be part of both proactive PR campaigns and crisis communication plans. Ensure you know what you would do if you faced a backlash because you can’t please all the people all of the time.
The advice we offer during our crisis communication training is that if your brand wants to use its profile to raise awareness of subjects it believes are important, it needs to:
Consider the audience
You must know your audience or the audience you want to appeal to.
What do they care about? How much do they care? Do they want you to care too? Is this the right issue for that audience?
Could it appeal to some of the audience but alienate others? The approach taken by Coutts may appeal to the younger super-rich but appears to have alienated its older customers.
Stick to it
If you want to take a stand on an issue, stick with it. Don’t flip-flop between different views as soon as there is criticism.
Bud Light did this and ended up upsetting just about everyone.
Hypocrisy
Is there anything about your business that suggests the stand you are making is hypocritical?
If Coutts had an issue with the views of Mr Farage, does it have other high-profile customers with opinions others may find offensive?
Considering it once offered offshore services to a member of the Brunei royal family accused of stealing billions from his own country, it seems plausible.
Even General Pinochet was deemed worthy of its service.
What you say must be matched by what you do.
Plan
It seems inevitable there will be a fallout at some stage.
Preparing for the backlash, as part of your crisis communication planning, could be the difference between emerging unscathed or looking for a new boss to pick up pieces of your reputation.
Can Coutts rebuild its reputation?
That’s hard to answer at this stage.
The story still seems to have legs. Mr Farage appears to want more scalps.
'I’m astonished it’s just Dame Alison that's gone so far - I think more need to go and the board made a stupendous error. I suspect this problem is bigger than anyone realises.'@Nigel_Farage responds to NatWest CEO Dame Alison Rose's resignation amid Coutts' debanking scandal. pic.twitter.com/WvKweit8U3
— GB News (@GBNEWS) July 27, 2023
What it does show is just how fragile reputations are.
Coutts was founded in 1692. The Duke of Wellington and Charles Dickens are among its former customers.
Yet, in just a few weeks, that reputation has been reduced to tatters by the approach taken to one customer and how it handled the fallout.
And all at a time when a case can be made for there being much bigger stories around.
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