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14. Starbucks and Microsoft execs in "tone deaf" storm
It's hard to fathom how some of corporate America's ultra-elite can possess the intelligence and courage to lead conglomerates yet lack the self-awareness needed to connect with the very people they rely on-employees and customers.
Judging by the tone-deaf behavior from CEOs last year, this may be a common affliction. Their actions often did little to strengthen bonds with stakeholders.
Some of the most cringeworthy moments came from high-profile leaders, particularly the CEOs of Microsoft and Starbucks. Microsoft CEO Satya Nadella drew criticism for accepting a $30 million raise -a 63% increase from 2023-while the company was laying off thousands of employees. According to CEO Today , Microsoft had laid off nearly 2,500 workers, including 1,900 from its gaming division, in the third quarter alone. The publication posed a pointed question:“Can a massive pay increase for a CEO be justified when thousands of workers are being laid off?”
Starbucks CEO Brian Niccol, meanwhile, faced backlash for commuting weekly by private jet from his California home to the company's Seattle headquarters. This luxury travel arrangement clashed with both Starbucks' reputation as a climate-conscious brand and the growing anti-elitism sentiment among consumers.
With pay packages worth $79.1 million and over $100 million respectively, Nadella and Niccol could have demonstrated greater humility and adapted their behavior to the economic and social climate.
The issue isn't confined to individual executives. Companies, grappling with“unprecedented CEO turnover” in 2024, frequently offered“rich and creative compensation packages” to woo candidates, a trend that garnered attention but also fueled outrage, said Carreen Winters, president of reputation management at MikeWorldWide.
“In times of uncertainty, one thing is for sure - CEOs face even greater scrutiny. From rich pay packages to corporate jets, the resentment of average American workers rises as economic conditions decline,” Winters said.“High inflation, fear of layoffs, and overall economic anxiety fuel and even justify questions about executive compensation. Placed against a backdrop of pent-up 'anger at everything' and the unequivocal demand for change evident during the most recent presidential election, it's no wonder that CEOs are under fire.”
Companies also face opposition from within. Extreme CEO salaries could be hurting companies' bottom lines. A 2023 study from two progressive organizations found that excessive CEO-worker pay gaps hurt employee morale, leading to reduced productivity and higher turnover.
While there has yet to be widespread institutional changes addressing the issue, there are indications that companies may be getting the message.
“Forward-thinking companies are reevaluating things and some are linking CEO pay beyond past formulas and tying compensation in a manner tied to worker pay. And in a year when organized labor interest was at all-time high, CEO pay (a favorite topic for labor) is front and center,” Winters said.“Sometimes you just have to take the punch and move forward. Because there is no successful playbook called 'In defense of CEO salaries.'"-Diana Marszalek
13. AstraZeneca hits fraud turmoil in China
AstraZeneca's shares plummeted by over 8% last November, diminishing the company's market value by £14 billion following reports of a potential insurance fraud case involving numerous senior executives in its China unit.
The turmoil began when Leon Wang, AstraZeneca's China president and executive vice-president for international markets, was reported to be under investigation by Chinese authorities. Michael Lai has since taken over his responsibilities.
Reports from Chinese media at the time suggested that several executives were under investigation, with the inquiry involving various authorities, including the public security bureau.
Additionally, in September 2024, it was revealed that five current and former employees were detained due to concerns over data privacy violations and unauthorized medication imports.
The investigations focused on allegations related to an unapproved liver cancer treatment and the methods used to collect patient data, further complicating the company's operations in China. AstraZeneca stated at the time that its commitment is to cooperating with authorities while continuing its operations in the region.
According to Syed Mohammed Idid, general manager of strategic communications and stakeholder engagement at West Coat Expressway, the recent AstraZeneca crisis highlights significant lessons for Southeast Asia regarding the importance of corporate governance and regulatory compliance in the pharmaceutical sector.
“As the investigation unfolds over allegations of insurance fraud linked to senior executives, it underscores the necessity for multinational companies to establish rigorous ethical standards and compliance protocols, especially in regions with complex regulatory environments such as China,” he said.
“Companies operating in Southeast Asia must prioritise transparency and proactive measures to mitigate risks associated with misconduct and ensure adherence to local laws, which can vary significantly across the region,” he added.
Idid added that additionally, this situation emphasises the need for robust crisis management strategies and crisis communication plans.
“However impressive a company's market presence may be, unexpected challenges such as these can erode investor confidence and market value rapidly, as evidenced by AstraZeneca's significant share price decline,” he explained.
Idid went on to say that Southeast Asian firms must be prepared to respond swiftly and effectively to issues that may arise, integrating regular risk assessments into their business models and fostering open lines of communication with stakeholders. He said that Such preparedness protects corporate reputation and contributes to sustained investor and consumer trust in an increasingly volatile market landscape.
Adding to his point, Ashvin Anamalai, chief executive officer of DNA Creative Communications noted that this case offers significant lessons, particularly from a public image perspective, on how multinational companies can manage crises in highly scrutinised markets.
One of the clearest takeaways, Anamalai said, is the importance of proactive communication and transparency during a sensitive investigation.
“By swiftly addressing the situation-such as announcing leadership changes and cooperating with authorities-AstraZeneca demonstrated a measured approach to crisis management. This helped maintain a degree of trust with stakeholders, despite the challenge,” he said.
Additionally, the case highlights the critical role of localised strategies in crisis response.“It's not enough to have a one-size-fits-all global communication plan; companies must understand the nuances of local expectations, cultural sensitivities, and regulatory frameworks to craft effective messaging,” he said.“Moreover, the involvement of multiple Chinese regulatory bodies and the media's scrutiny underscores the need for consistent, clear, and timely updates to manage public perception and prevent misinformation.
He added that in the age of instant communication, maintaining credibility is as much about the tone and timing of the message as it is about the actions taken behind the scenes.“This situation reinforces the value of a well-prepared crisis communication strategy as an integral part of a company's global communications framework,” he said.-Camillia Dass
12. Qantas: Never lose sight of the customer
For more than 100 years, Qantas was one of the most respected brands in Australia. It did the important things right-from safety to customer service to shareholder returns-and it got involved in broader societal issues, with CEO Alan Joyce leading campaigns for LGBTQ rights in Australia and Ireland.
But in the wake of the pandemic, which hit all airlines hard, customer complaints soared as cancelations hit record levels . Employees were alienated too, after baggage handlers were fired as the airline sought to outsource their work to contractors (the company was later ordered to pay $120 million to those employees).
But such things are, if not routine, hardly extraordinary. What tipped the airline's growing problems into crisis territory was a series of revelations about perks offered to politicians. Some of those reports focused on Australian Prime Minister Anthony Albanese and claims that while he was Transportation Minister he asked for free upgrades on personal flights, often talking to Joyce directly.
“The crises could have been avoided by prioritizing customer service over profit, addressing passenger complaints effectively, focusing on ethical and transparent business practices, addressing competition concerns, proactively engaging with regulators, and avoiding entanglement with politicians,” says Robin Sefiani, president of the Australian corporate affairs firm that bears her name.
“Qantas should have focussed on delivering the airline's core services well and responsibly rather than putting the interests of shareholders first.”
Craig Badings, partner at Senate SHJ, says,“At the nub of the Qantas crisis in 2024 was corporate culture-specifically a culture created by a singular focus on shareholder primacy at the expense of the customer.”
To recover and rebuild, he says,“They will need to do three things consistently well: Confirm the mistakes made, Act to rectify them, and Relate to customers and other stakeholders about what it has done.”
Adds Sefiani,“The reputational crisis that engulfed the airline and led to the spectacular fall from grace of its celebrity CEO and the once loved Qantas brand demonstrates that no one is above the law. The relentless pursuit for profit at the expense of customer service, employee rights, and fair-trade practices, cost Qantas its good reputation.”-Paul Holmes
11. Volkswagen: Walking the razor's edge of communications
In late 2024, Volkswagen (VW) dropped a bombshell on its home turf, announcing plans to close several key factories in Germany, including its iconic sites in Dresden and Osnabrueck. The closures were blamed on declining demand for electric vehicles across Europe and the skyrocketing costs of labour, energy, and raw materials, as well as overcapacity and intensified competition, particularly from China.
This was not just any corporate decision - it struck at the heart of Germany's industrial pride and workforce. To make matters worse, the announcement came amid ongoing negotiations with the powerful IG Metall trade union, which represents hundreds of thousands of auto workers. German chancellor Olaf Scholz, echoing public outrage, lambasted VW, calling the closures “not the right way” to address their challenges. Local communities, already reeling from economic uncertainties, rallied to protest what many saw as a betrayal of the company's historical roots.
VW's handling of the announcement was far from smooth. The company issued a statement claiming that“new realities” demanded tough decisions but failed to provide clear plans for affected workers. The IG Metall union's accusations that VW was dragging its feet on critical decisions about pay and job security further stoked tensions. Behind closed doors, negotiations dragged on for weeks, marked by rumours of heated exchanges and strike threats. Meanwhile, VW's leadership faced mounting pressure to present a more empathetic and detailed roadmap for addressing the human impact of their restructuring plans.
After intense discussions , VW eventually reached an agreement in December with IG Metall to postpone immediate plant closures and avoid compulsory redundancies, albeit with the loss of over 35,000 jobs and the reduction of production capacity at German sites by over 700,000 vehicles. Two sites are to cease production but are to be redeveloped for other uses. Earlier discussions about plant closures have been mentioned, and the job guarantee that excluded redundancies, which was terminated in September, has been reinstated and extended until 2030.
While this averted an all-out industrial crisis, the damage to VW's domestic reputation was palpable. Workers and communities felt alienated, while industry analysts criticised VW's reactive communication strategy.
At Team Farner, crisis practice head Patrick Hacker – also deputy MD at Komm in Germany – says VW could have taken the easy road:“A few harmless platitudes, a touch of diplomacy, and the well-worn appeal to unity. But none of that would have steered the lumbering behemoth through the needle's eye of these labor negotiations. Instead, the communications team opted for something Wolfsburg seems to have rediscovered: backbone.”
The labor unions“are no paper tigers” at Volkswagen, says Hacker.“They're roaring lions – lions with microphones and a flair for commanding the public stage. Add to that the political entanglement: the state of Lower Saxony holds a 20% stake in the company, making board meetings resemble party caucuses.”
Meanwhile, VW's share price has taken a nosedive, shadowed by the“lingering stench of Dieselgate,” as Hacker calls it.“Shareholders are disgruntled, capital markets on edge, and every public utterance from the management must tiptoe through the minefield of legal disclosure requirements.”
So, what's the play when stakeholders are shouting over each other? Hacker says:“Prioritization. And that's exactly what Volkswagen did. The message was clear: shareholder interests came first, and the communication strategy was ruthlessly aligned to secure the company's strategic goals. No, it wasn't charming. It wasn't conciliatory. But that was precisely the point.
"It's time for an uncomfortable truth: Volkswagen didn't aim to please everyone. They ignored the noise, tuned out the critics, and executed what was necessary. The strategy was cold, calculated, and effective. Well played, Volkswagen. Corporate communications delivered.” -Maja Pawinska Sims
10. OpenAI's multiple copyright lawsuits
Last year was anything but smooth sailing for ChatGPT owner OpenAI. The AI juggernaut found itself entangled in a series of copyright lawsuits, with plaintiffs ranging from best-selling authors to major news organisations. At the core of these legal battles were allegations that OpenAI had used copyrighted materials-without permission-to train its AI models.
The lawsuits gained traction as high-profile figures, including literary icons, came forward to challenge what they called a blatant exploitation of intellectual property. Adding fuel to the fire, several countries began scrutinising AI's impact on data ownership and copyright laws, intensifying the global debate around AI regulation. One key case in New York, where news outlets accused OpenAI of scraping and misusing their content, marked a watershed moment. Though the judge dismissed the lawsuit, it showcased the growing hostility AI companies face from content creators.
OpenAI took a combative stance throughout the year, firmly defending its use of publicly available data as both lawful and necessary for innovation. In India, OpenAI faced a lawsuit from ANI news agency and argued that removing data from its training models would violate US legal obligations.
This move highlighted the company's reliance on an international legal framework to justify its practices. However, critics accused OpenAI of prioritising technical justifications over ethical considerations, leaving many stakeholders unconvinced about its commitment to fair use principles. The company's public statements largely stuck to a defensive narrative, which some analysts felt missed an opportunity to engage more meaningfully with aggrieved parties.
While OpenAI scored several legal victories, including the dismissal of the New York lawsuit, the year-long litigation spree dented its reputation. The lawsuits amplified public concerns about AI's impact on the creative industries, and the company's perceived arrogance did little to allay these fears. The crisis revealed a pressing need for clearer copyright laws in the AI age, but it also put OpenAI on notice - highlighting the reputational risks of operating in a rapidly evolving legal and ethical landscape.
SourceCode Communications UK and Europe MD Giles Peddy says that, facing multiple lawsuits, OpenAI had“leaned heavily” on the US fair use doctrine, arguing that its transformative use of data exempts it from infringement claims.
However, he says, OpenAI operates in a legal grey area, shifting responsibility for data usage onto creators and awaiting legislative or federal intervention, which seems unlikely given the rollback of president Biden's AI-focused Executive Order by the new Trump administration.
Peddy's assessment is that on the surface,“OpenAI has managed these challenges effectively, securing legal victories and establishing licensing agreements with publishers. These deals not only mitigate future lawsuits but also provide access to real-time data.”
Yet, from a communications standpoint, he says“existing in this grey area leaves OpenAI vulnerable to subjective scrutiny. Leaks from current and former employees suggest mounting internal ethical concerns, and if these voices grow louder, the company could face significant reputational damage.”
Despite this, OpenAI's strategy-claiming no harm, delegating responsibility, and building partnerships-has kept criticism at bay. As Peddy says:“Users remain indifferent to data usage ethics, and publishers have softened objections due to licensing arrangements. By exploiting legislative gaps, OpenAI continues to innovate and grow. This strategy is effective for now, but how long it holds will depend on legal rulings and whether regulators finally step in.”-Maja Pawinska Sims
9. Heinz learns a hard lesson in cultural sensitivity
You'd think pitching pasta sauce would be a straightforward endeavor, especially for a company like Heinz, which is well-versed in crafting appetizing campaigns for packaged foods.
But last fall, the US brand-part of the Kraft Heinz Company-learned the hard way that, amidst heightened awareness of cultural sensitivity, even marketing marinara can be a high-stakes venture if not aligned with contemporary expectations.
Heinz's reputational troubles began in October, when the food giant debuted ads in London tube stations promoting its family-sized pasta sauces. The campaign featured a wedding scene with a Black bride, a white groom, and his parents. However, the notable absence of the bride's father sparked widespread criticism, with detractors accusing Heinz of perpetuating the harmful stereotype of absent Black fathers.
The uproar intensified after writer Nels Abbey shared a photo of the ad on X , captioned:“For my brothers with daughters. Because, believe it or not, Black girls have Dads too.”
In response, Heinz swiftly issued an apology , telling the Independent:“We always appreciate members of the public's perspective on our campaigns. We understand how this ad could have unintentionally perpetuated negative stereotypes. We extend our deepest apologies and will continue to listen, learn, and improve to avoid this happening again in the future.” The company removed the ads, and the backlash subsided.
“The public reaction to the Heinz advertisement that reinforced racial stereotypes about the absence of Black fathers reveals two essential truths,” said Carreen Winters, president of reputation management at MikeWorldWide.“The importance of cultural competency is not dead, even if some brands and organizations are backing off from DEI. In today's marketplace, stakeholders speak out, and their reaction is swift.”
Winters also emphasized the power of a well-delivered apology.“Consumers are generally forgiving when an apology is delivered humbly, quickly, and simply. This is precisely what Heinz did-they acknowledged the problem, took responsibility, and promised to do better. In an era where cancel culture is one of a brand's greatest fears, it's reassuring to see that a sincere apology still carries weight.”
How such a misstep occurred remains a critical question. As a global brand, Heinz should be well-equipped to identify potential pitfalls, particularly when addressing sensitive issues like DEI.
“Sometimes people try to do too much, and in their quest to engage multiple consumer segments, they end up being offensive and missing the mark,” said Helen Shelton, senior partner and global chief diversity officer at Finn Partners.“When you miss the mark with an ad or activation, it can have significant ramifications for your business.”
Shelton noted that one common error among brands is bypassing the due diligence needed to get inclusive marketing right, which includes authentic engagement with diverse communities.“Cultivation without authentic engagement is a big no-no,” Shelton said.
Regarding Heinz's ad, Shelton acknowledged that the company's good intentions-such as normalizing interracial marriage-were overshadowed by the oversight of not including the bride's father.“It's unfortunate,” Shelton said.“We're in a place where everyone is so sensitive about these matters that it should have been a red flag immediately. And that's unfortunate because, at the end of the day, they were just trying to sell sauce.” -Diana Marszalek
8. Trust in Google hits a federal wall
In August 2024, Google suffered a landmark legal defeat when a US federal judge ruled that the company had violated antitrust laws. At issue were Google's exclusive agreements with browser developers, smartphone manufacturers and wireless carriers, which allegedly ensured its dominance as the default search engine. These practices were found to stifle competition, inflate advertising prices, and enable Google to rake in monopoly profits.
The case, spearheaded by the US Department of Justice, marked the most significant antitrust action against a tech company since the Microsoft trials of the late 1990s. The verdict sent shockwaves through Silicon Valley, signalling a more aggressive regulatory environment for Big Tech.
Google's initial response was defiant, with the company asserting that its market dominance was a result of offering superior products that consumers chose freely. However, as the legal and reputational pressure mounted, Google pivoted slightly, proposing changes to some of its agreements, including loosening its deals with Apple to serve as the default search engine on new devices. Internally, Google's leadership sought to reassure employees and investors, framing the judgement as a temporary setback while pledging to appeal the decision. Externally, however, the company struggled to shake off the perception that it had abused its market power.
The antitrust ruling was a watershed moment, with potentially far-reaching consequences for Google's $300 billion annual digital ad empire. The judgement also emboldened regulators worldwide to take a tougher stance on monopolistic practices in the tech sector. For Google, the crisis underscored the reputational risks of being perceived as a monopolist. While the company remained resilient in the face of legal challenges, the episode served as a stark reminder of the growing scrutiny facing tech giants in an era of heightened regulatory activism.
According to the SenateSHJ Crisis Index 300, the impact of the Google anti-trust proceedings and regulatory scrutiny was an 11% drop in share price.
At Folgate Advisors, crisis specialist Philippe Borremans says Google's response to the antitrust judgement“shows both strategic strengths and significant missed opportunities in its approach.”
He says:“While the communications team has maintained a consistent message about product quality and consumer benefits, it has failed to adapt its narrative to changing public opinion about Big Tech. Their core message – that market dominance is based on superior products – seems increasingly disconnected from current discussions about monopoly practises and fair competition.
“Google has actively used public platforms, including blogs and media statements, to address allegations and respond to court rulings. Through this direct engagement, the company strives to shape the narrative, minimise reputational damage, and garner support from users who appreciate its services.”
However, the discrepancy between external messages and internal practises poses a particular challenge, says Borremans:“Revealing a 'culture of concealment' directly undermines Google's public commitment to transparency and creates a credibility gap that could have a long-term reputational impact. Their recent move to propose compromises, particularly on contracts with device manufacturers, shows that they better understand the concerns of stakeholders, but this more pragmatic approach could have proved more effective if it had been adopted earlier in the process.”
Going forward, Google faces a substantial communications challenge: striking the delicate balance between defending its business model and genuinely committing to fair competition. To succeed, says Borremans,“Google must move beyond merely reactive responses and proactively engage with stakeholder concerns about market dominance and competitive practices. While the company's current strategy may support its legal position, it risks undermining stakeholder confidence – a critical factor in addressing increasing regulatory scrutiny.”-Maja Pawinska Sims
Part 1 of the 2024 Crisis Review is here ; Part 2 is here .
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