Here’s how to protect your corporate reputation

Corporate issues are increasingly being politicised. Fuelled by intensifying media interest and public scrutiny, it is a growing risk to many businesses in the UK.

If you're called to give evidence, get help in preparing, says Amy Cornelius

Companies required to give evidence to parliamentary committees and public inquiries face a particular exposure, with the potential for significant damage to their reputation.

While they serve an important role in our democracy, the work of parliamentary committees and public inquiries requires careful management to help safeguard a company’s corporate reputation.

Parliamentary committees are generally conducted in public. The remit of committees is to examine the work of government departments and the Civil Service and hold them to account.

However, that will sometimes stray into investigating private sector businesses, such as when the Net Zero, Energy and Transport Committee called executives from across the rail industry in 2023 to look at the performance of rail services in Scotland. While Parliament could sanction a non-cooperative witness, the greater impact of a refusal to appear is likely to be damage to a company’s or an executive’s reputation.

Public inquiries and Fatal Accident Inquiries, such as the inquiry into the Clutha helicopter crash, serve a quasi-judicial role, analysing large quantities of evidence, establishing facts and pronouncing views on culpability and accountability. They are increasingly being broadcast and reported in the press, with witnesses compelled to give evidence under oath and the disclosure of documents. While final recommendations resulting from public inquiries are not legally binding, they too can have a reputational impact on companies involved in or connected to those proceedings.

It is not always possible to control the level of exposure that can arise from a parliamentary committee or public inquiry, however, there are ways companies can mitigate some of the reputational risks such processes present.

Preparation is key. Putting procedures and an advisory team in place in advance is essential. Crisis response protocols will help give a company a better understanding of the types of issues likely to require escalation and is key in establishing clear reporting lines, stakeholder involvement and decision-making processes.

Agreeing lines of communication is paramount. A company’s board must be clear on who its spokespeople will be, and how its message should be communicated to employees, business partners, the press and social media. It’s important to maintain an ongoing line of communication to those best placed to deal with any issues as they arise, including the external support of lawyers and PR advisers.

It is also essential that detailed facts likely to emerge through questioning by a parliamentary committee or public inquiry are thoroughly investigated. The knowledge gained from such investigation will provide a basis to push back on objectionable reporting or misinformation, should it arise. By contrast to the position in court proceedings, witnesses can be helped to prepare their evidence. That may be critical where there could be follow-on litigation, regulatory enforcement or criminal prosecution.

Companies should consider whether the risks faced in any proceedings are insurable. An audit of third-party contractors is also advisable, to ensure that those business connections operate in a manner which is consistent with a company's culture and values.

While parliamentary interventions and public inquiries do carry a reputational threat, it is always advisable that companies cooperate when called to be questioned. Adopting a proactive approach in managing such proceedings can make the difference between safeguarding or destroying a corporate reputation.

Amy Cornelius is an Of Counsel and disputes resolution specialist at CMS