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Crisis Review 2024 Part 2: 21-1
Crisis Review 2024 Part 3: 14-
Crisis Review 2024 Part 4: 7-1
28. SingPost whistleblower leads to governance action
On December 21, 2024, local Singapore postal Service Provider Singapore Post decided to terminate the employment of three high-ranking executives: group CEO Vincent Phang, group CFO Vincent Yik, and Li Yu, head of the international business unit. The company cited its“grossly negligent” handling of internal investigations following a whistleblower report concerning improper practices in its non-regulated international e-commerce logistics business.
The whistleblower's allegations indicated that manual entries of delivery statuses were made to avoid contractual penalties with a significant but unnamed customer. An investigation resulted in disciplinary actions against the executives and the filing of a police report.
Despite the terminations, Phang and Yik claimed their dismissals were unjustified, asserting they had acted according to company guidelines and in the company's interests.
Investors reacted negatively, with SingPost's shares dropping by over 10%. Subsequently, the Infocomm Media Development Authority encouraged SingPost to uphold proper governance practices.
The company expressed confidence in its legal position and announced plans for leadership restructuring. As discussions regarding an independent inquiry into the incidents began, the dismissed executives indicated they would cooperate, prioritising establishing the full facts over pursuing litigation.
“In major announcements, a detailed stakeholder engagement strategy is essential to ensure that key target audiences are made aware of circumstances pertaining to the announcements, especially when and if investor confidence may be impacted,” said Jose Raymond, managing director of SW Strategies.
“While all details need not be revealed on the record, having such a strategy in place would minimise the risk of misunderstandings or loss of share value, and would also ensure that the brand does not take a massive confidence hit in the eyes of the general public,” he added.-Camillia Dass
27. Baidu's PR leader goes rogue
In May last year, Chinese search engine Baidu's head of public relations created a media storm of her own making when she posted a series of videos attempting to justify the unreasonable treatment of the employees under her.
In the videos, which were posted on social media site Douyin, Qu Jing, Baidu's vice president and head of the public relations department said that in public relations, employees should not expect weekends off and that they need to keep their phones on them 24 hours as day and be always ready to respond. She also criticised employees who did not like going on longer business trips, saying she has no obligation to know if employees are crying and no obligation to consider the families of her employees as she is not their mother.
She added that if staff were unhappy, they could resign and that she would approve it immediately.
“Out of touch and out of a job, said Oliver Ellerton, director of Ellerton & Co.“The Baidu crisis involving Qu Jing was hopefully the death pangs of a way of working that should never have embedded itself like it did. The glorification of the '996' work culture is increasingly seen as outdated and detrimental.”
He added that there is a global shift toward empathy-driven leadership, which values work-life balance and employee well-being.“Companies failing to align with this sentiment risk appearing tone-deaf and out of touch, as seen with Qu Jing's comments,” he said.
Ellerton went on to explain that the incident illustrates that employees, especially senior leaders, are perceived as extensions of the brand. Social media erases the boundaries between personal views and corporate values, emphasising the importance of consistent messaging,” he said.
“Qu's remarks, while personal, were perceived as reflective of Baidu's corporate culture, causing reputational harm,” he added.
“For PR leaders, the lesson is clear: understanding cultural and generational nuances is not optional but necessary. In today's interconnected world, brands must view their communications through a global lens while remaining sensitive to local expectations. We often counsel clients, particularly those expanding into new markets, to prioritise cultural sensitivity, proactive internal communications, and robust social media guidelines. These steps mitigate potential crises and build trust and authenticity,” he said.
Ellerton added that lastly, the incident underscores the consequences of poor leadership in PR. A head of PR must embody the principles of effective communication, empathy, and cultural awareness. When they fail, the resulting crisis can call into question the organisation's values and credibility, as happened with Baidu, he said, adding that this case serves as a“stark reminder” that in PR, your people-and their behavior-are the brand.
Adding to his point, Ray Rudowski, managing director of Epic Communications said that the issue was more than just a public relations dust-up but that it impacted Baidu's bottom line.
China's English-language tabloid Global Times reported that following the incident, Baidu's Hong Kong-listed stock price continued to decline, closing at HK$106.9 on Wednesday, down 1.29 percent. As of press time, Baidu's US-listed stock fell 0.92 percent to $109.51 on Wednesday."
“The reason for this is that social harmony in China is a major issue that has to be managed in large part by corporations. This explains why there was such prominent coverage of this issue within China to the point of investors dumping the stock,” said Rudowski.“The way it was covered within China is noteworthy and illustrates the tremendous power that consumers have in voicing their concerns and complaints towards big brands and corporations.”-Camillia Dass
26. Harrods grapples with the ghost of Al Fayed
In September, a shocking BBC investigation into multiple women's allegations of sexual abuse by Mohamed al Fayed, the former owner of luxury department store Harrods, triggered a media frenzy and a crisis for the iconic London landmark's owner since 2010, Qatar Holdings.
Harrods' leadership and communications teams faced the delicate challenge of distancing the brand from its former proprietor and protecting the integrity of the brand, while addressing public concern over its association with the testimonies of more than 20 women and showing respect and sympathy for the victims.
With horrifying accounts of abuse that spanned Al Fayed's 25-year reign at Harrods, the BBC documentary exposed the scale and seriousness of the allegations for the first time, as well as a cover-up of his activities that extended throughout the organisation.
Al Fayed had long been a controversial figure in British business circles. The Egyptian-born billionaire, who died in 2023 aged 94, is accused of multiple counts of rape and attempted rape by the women who worked for him. At the time of many of the alleged attacks, Al Fayed was the owner of Harrods, the Ritz Paris hotel – forever associated with the death of his son Dodi and Princess Diana – and English football club Fulham FC.
Before the BBC investigation, red flags around Al Fayed's behaviour had been raised repeatedly over many years , with no comment from Qatar Holdings in the intervening 14 years since it took over Harrods.
After the exposé, however, Harrods' communications team moved quickly, issuing a statement that didn't rely on legalese or shy away from the allegations, stating the company was“utterly appalled” and that these were“the actions of an individual who was intent on abusing his power wherever he operated and we condemn them in the strongest terms. We also acknowledge that during this time his victims were failed and for this we sincerely apologise.”
The statement emphasised that Harrods is now a“very different organisation” to the one owned and controlled by Fayed between 1985 and 2010, and“seeks to put the welfare of our employees at the heart of everything we do.”
Harrods also took proactive measures to address the situation, including initiating an internal review of past practices and cooperating with ongoing investigations. Harrods also engaged in discussions to settle compensation claims with over 250 individuals alleging misconduct by Al Fayed, appointing Dame Jasvinder Sanghera, leading expert in supporting women impacted by sexual abuse as Independent Survivor Advocate. Since the BBC investigation aired, hundreds more women have come forward.
Kate Hartley, co-founder of crisis simulation company Polpeo and author of 'Communicate in a Crisis' said it was hard to imagine the scale of the alleged abuse by Al Fayed.
“The stories are horrific. Harrods has apologised, but made clear these were the actions of an individual, and puts distance between the Harrods of today and that of the organisation under Fayed's control. Apologising is clearly the right thing to do. It's a difficult line to tread, addressing the abuses of the past while protecting the brand as it is today. The driving purpose and goal of the organisation must be to do the right thing by the victims of abuse, whatever that takes.”
On internal enquiries in general, Hartley said there can be a conflict of interest between supporting the people affected by the crisis, and a desire to protect the company's reputation, which often leads to cover-ups.
She said:“Harrods has done the right thing by setting up an internal review to ensure there are no remaining abusers within its employ, and has appointed an independent survivor advocate to ensure there's no clash of interest between supporting survivors and protecting the Harrods brand. It has also been very clear on its website how survivors can engage with Harrods, which shows it is addressing the issue head on.”
Hartley concluded:“The real proof of how Harrods is handling this will be in how it engages with and compensates survivors. It can't be seen to mark its own homework and will have a real challenge on its hands to change the culture of the organisation to one of psychological safety, where employees can freely speak out against abuse.” -Maja Pawinska Sims
25. Samerji Subjects Itself to the Streisand Effect
One of the first corporate crises I ever wrote about was a notorious UK litigation in which McDonald's decided to sue environmental activists for libel based on leaflets they handed out outside the company's restaurants. The McLibel case became Britain's longest running trial and while the defendants were found to have libelled the company, the publicity around the lawsuit amplified their message far beyond what a few leaflets could have achieved.
The McLibel trial was the ultimate corporate“pyrrhic victory” and has become legendary in legal and PR circles. But that doesn't mean its lesson has been learned by everyone. Icelandic fishing conglomerate Samerji, for example, decided it would sue an artist , Odee Fridriksson, for satirizing the company's role in an international corruption scandal-thus ensuring that an obscure art project and-to be fair-an obscure scandal received far more international attention than it deserved.
Like McDonald's, Samerji benefited from Britain's plaintiff-friendly libel laws and won in court. But it lost in the court of public opinion, with publications from The Guardian to Reuters ensuring that information about alleged bribes in Namiia drew international scrutiny, and social media taking up the cause of the persecuted artist-a classic example of what has become know as“the Streisand effect .”
Says Alan Morrison, owner of ASM Media & PR,“The case will have created awareness of the allegations in the Namibian case to stakeholders who weren't aware of them, creating more reputation damage than was already the case. Samherji also blogged the result of the London case on its website without saying what the offending site was about, creating curiosity and doubtless prompting some to search for and find what it was about.”
Even people who were unaware of the initial allegations, or unconcerned by corruption in Namibia, were appalled by the attack on free expression and the bullying of an artist. The company's retail clients too, must have been appalled by the increased scrutiny the case attracted.
Morrison's conclusion:“Regardless of the legal validity of Samherji's case for IP infringement, the optics of this in the court of stakeholder opinion runs the risk of looking like trying to digitally silence a vocal critic ahead of the Namibian court case-which will air the allegations fully anyway.” -Paul Holmes
24. G4 Educação CEO dismisses female executives
Even in a country where cultural and systemic barriers continue to hinder women's rise up the corporate ladder, G4 Educação CEO and co-founder Tallis Gomes's comments last September disparaging female executives marked a new low in Brazil's gender equality conversation.
“God forbid a female CEO,” Gomes remarked on social media when asked whether his wife would consider becoming a chief executive. He further claimed that female CEOs undergo a "process of masculinization," which he suggested undermines traditional family dynamics. The irony was not lost on many: these remarks came from someone who, as the head of a business education platform, profits from selling executive and leadership training.
“The G4 case is an example of how people can make nonsensical comments to gain 30 seconds of attention,” said Zé Schiavoni, executive chairman of Weber Shandwick's Brazil operation.
If attention was what Gomes sought, he got it-but not the kind he might have hoped for. His dismissal of female executives sparked a wave of backlash, including from high-profile women leading Brazilian companies.
Gomes issued a public apology, calling his comments“unacceptable,” but the apology was widely criticized as superficial and failed to mitigate the damage. Within days, Gomes resigned as CEO. Not surprisingly, he was succeeded by a woman, Maria Isabel Antonini, the company's CFO.
At first glance, the situation seemed to reflect a classic corporate crisis triggered by a leader's poor judgment. However, the G4 Educação case underscores deeper lessons.
“The crisis highlighted essential insights about the importance of clearly separating personal and corporate brands-lines that are often blurred-ensuring leadership behavior aligns with company values, and proactively managing reputational risks,” said São Paulo-based Patricia Zylberman, head of public relations at Sherlock Communications.
But G4 Educação didn't leave it at that. Instead, the company risked further reputational damage by reintroducing Gomes as a spokesperson.
“The funny thing is that the CEO was dismissed, but he's still active on social media, 'selling' courses. It seems his dismissal was just a superficial move to reduce the impact,” Schiavoni said.
Zylberman echoed those concerns.“Gomes's recent return as a spokesperson on G4 Educação's social media has raised public doubts about the sincerity of the company's crisis management efforts,” she said.
“Some speculate that the brand has embraced Gomes's controversial views, reflected in its social media content, which appears tailored to specific ideological groups. While G4 Educação is no longer dominating headlines, its strong social media performance suggests it has retained its audience. However, this strategy carries risks: polarizing approaches could alienate prospective clients, threatening long-term growth.” - Diana Marszalek
23. Wisetech Falls Victim to the“Cult of the Founder”
Australian technology company Wisetech found itself in the spotlight last year when billionaire founder and major shareholder Richard White found himself facing a series of allegations from women alleging sexual impropriety. One claimed he had demanded sexual favors in exchange for investing in her company, others complained about unsolicited messages on LinkedIn and other social media platforms.
Immediately after the media reports first surfaced Wisetech's shares plunged by 20%. Following a series of crisis meetings the board announced that White would step down as CEO but remain with the company on a consulting basis-which was enough to spark a recovery in the share price, even though questions about what the board knew and when persisted.
“The Wisetech scandal could be considered a failure of the“G” in ESG,” says Nicholas Owens, president, crisis and corporate communications at Australian consulting firm Sefiani, part of Clarity Global.“That is, a failure of governance at a large publicly listed company.”
The impact of the crisis was exacerbated by leaked documents showing that directors had previously expressed concerns about the oversized salary paid to a former senior female executive, which was not disclosed to investors. It also emerged that a former director who had resigned from the board after expressing concerns about White's behavior had been told to be more“founder empathetic”.
Adds Craig Badings, partner at Australian agency SenateSHJ:“This was a classic case of the creeping crisis and one where, as more and more information came to light, it became increasingly difficult to separate the man from the company. With every new, salacious revelation the reputation contagion spread from the CEO to the company and its culture as whole.
“Like many crises of this nature, when things first emerge, every effort is made to sweep things under the carpet. The allegations are dismissed as spurious, the person making the allegations is portrayed as an outcast or a gold-digger and the alleged perpetrator cast as a person of integrity or, in Richard White's case, a business 'genius'.”
This crisis, says Owens,“would appear to be one where a brilliant and enigmatic founder fails to adapt to the standards required of the leader of a major public company answerable to a wider group of stakeholders. White was synonymous with-and considered indispensable to-Wisetech's success; this and the fact that he was a major shareholder may have led the Board to accommodate behavior that would not be acceptable in another CEO.”
The main lesson for boards, Badings says, is to“act sooner rather than later.”
Adds Owens:“Ultimately Boards are there to set and uphold standards of behavior across the company on behalf of investors. Boards of high-growth companies making the transition to public ownership need to take extra care that the company and, importantly, its leadership understand and are equipped to meet the higher standards of accountability and compliance demanded by shareholders.” -Paul Holmes
22. Planet Fitness and the inclusive policy firestorm
In March, Planet Fitness, a gym chain built on the foundations of being a 'Judgement Free Zone', found itself at the centre of a cultural firestorm. The company has an inclusive changing rooms policy, allowing individuals to use the facilities aligning with their gender identity, but this escalated into a crisis when a female member photographed a transwoman using the women's locker room at an Alaskan gym and said on social media how uncomfortable she felt. Her membership was revoked by the gym.
The move ignited polarised reactions. Supporters of Planet Fitness hailed its policy as a necessary move towards greater acceptance and equality. However, the backlash to the membership revocation was swift and severe, with detractors accusing the company of compromising safety and privacy. This debate soon left the confines of social media and escalated into something far more sinister.
Planet Fitness locations across the country started receiving bomb threats . The threats prompted evacuations, increased security, and a wave of fear among members and employees. The company's communications team was thrust into overdrive, issuing a series of statements, emphasizing their commitment to inclusivity while condemning the threats. CEO Chris Rondeau appeared in multiple media outlets, reiterating that the safety of members was paramount and defending the policy as aligning with the company's core values.
While the company's messaging remained consistent, critics argued that Planet Fitness underestimated the backlash and failed to anticipate the potential for such extreme reactions. Others praised the firm's steadfast commitment to inclusivity, viewing it as a bold stance in the 'anti-woke' era.
Although Planet Fitness encountered short-term financial setbacks due to the controversy, the company's financial performance and market position remained robust. In the immediate aftermath of the backlash, Planet Fitness's stock price experienced a decline of around 10%, but this was temporary. By January 2025, the stock had rebounded significantly, gaining over 125% and nearing an all-time high, with the company reporting solid financial results in the third quarter of 2024, including more than 5% revenue growth.
BPI president and founder Andrew Bleeker says Planet Fitness was“a great example of leading with the bigger picture” – in this case their values on supporting their members.“In our current media landscape, you can't win playing whack-a-mole and chasing every latest attack. Reaffirming their values worked because they were able to handle the issue locally while having a clear foundation to come back to that audiences already largely believed.”
He adds:“Clearly, when the physical safety of not only your customers, but your team members, is threatened, it demands a response – which is exactly what Planet Fitness did, working closely with law enforcement and supporting the impacted franchises. Because the backlash involved the threat of physical violence, it was clear that opponents' core issue wasn't actually with alleged harm of the gym's policies. Planet Fitness was able to clearly and consistently assert its values, and do so without taking the bait and putting them into a spotlight that they didn't want.”
In conclusion, Bleeker says:“The clearest indication that this was an effective strategy? The bottom line. Planet Fitness is trading at an all-time high, illustrating how effective consistency can be.”-Maja Pawinska Sims
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