How the 21 st  century spawned the need  for active reputation management

by Michael Farrant Founder & CEO, Farrant Group

Over the course of the past two decade s, a series of seismic shifts in the political, cultural and media landscapes have made it necessary for leading companies and high net worth individuals to radically reconsider their approach to managing their own reputations.

The public sphere in the 21 st  century has come to be characterized by an unrelenting drive towards transparency and accountability. While ostensibly pursued in the promotion of just causes, our society’s newly founded virtues are also being weaponized to the detriment of upstanding people.

Much like the legal sphere has long combatted nefarious ‘lawfare’ – the misuse of legal systems to damage, dispirit and delegitimize an opponent – so has the sphere of public opinion been increasingly engulfed by malicious rumours, misinformation campaigns and orchestrated media crusades.

All the while the rise of social media has served to fan the flames of propaganda and hearsay. Where it was once both possible and preferable to fly below the radar, it is has now become indispensable for high net worth individuals & families, leading companies and political candidates & organizations to control their own narrative through an active reputation management strategy.  

The brave new world of global transparency first took shape as a war on tax evasion officially declared in 2010, when America passed the Foreign Account Tax Compliance Act (FATCA) in response to scandals involving wealthy US citizens placing undeclared money offshore.

The law requires foreign banks and other financial firms to send data on American account-holders to the Internal Revenue Service. FATCA spawned a global version. Under the Common Reporting Standard (CRS), overseen by the OECD, more than 100 territories now swap data on their financial firms’ foreign clients.

CRS outlines the information to be exchanged, the institutions required to report it and sets out common due diligence procedures to be followed by all. For the first time in history a common standard was set for the financial probity of individuals and corporations across the globe.

Amongst other things the movement precipitated a range of high-profile international campaigns designed to name and shame individuals and entities falling short of the new standards.

In April 2016, the German newspaper Süddeutsche Zeitung and the International Consortium of Investigative Journalists (ICIJ) released 11.5 million leaked confidential documents belonging to Panama-based law firm Mossack Fonseca.

The ‘Panama Papers’ exposed the network of more than 214,000 tax havens involving people and entities from 200 different nations. The documents contained personal financial information about a number of wealthy individuals and public officials that had previously been kept private.

Among those named in the leak were a dozen current or former world leaders, 128 other public officials, and politicians and hundreds of celebrities, business people, and other rich individuals.

The event marked the beginning of a new cultural fascination with the rich and not particularly famous - a period in which wealth became the foremost form of international celebrity.

The topic of money started hitting the front pages as it never had before. Surreptitious headlines surrounding tax scandals, hidden fortunes and offshore accounts steadily began to supplant salacious stories about sex, drugs and rock & roll.

Meanwhile the impetus from governments to retrieve missing tax dollars had been spurred on by the need to start chipping away the colossal sums of debt built up during the prolonged period of overspending sustained throughout the late nineties and early noughties - a need made exponentially more urgent by the financial crisis of 2008.

These trends have coincided with the rise of the information economy, through which traditional standards of privacy have been gradually eroded as private citizens’ data has been harvested by tech and e-commerce platforms – and often sold back to governments – on an unprecedented scale.

As a result, it is no longer possible or desirable for leading companies and high net worth individuals to simply mind their own business.

Nature abhors a vacuum, and in our age above all others you must either write your own story or someone else will eventually write it for you. This is not about advocating for the dissolution of privacy, but rather acknowledging the need to take control of the wheel in light of the road our society has irreversibly turned on to.  

An effective approach to active reputation management is characterized by a number of key aspects. It must be holistic, in that one’s story – in addition to being true, needless to say – must be coherent and comprehensive. It must be pre-emptive, in that it must anticipate potential smears on every conceivable front. It will be highly reactive, such that targeted attacks are countered instantaneously, before a false or potentially defamatory claim is able to take root and grow a life of its own.

In practice, this starts with establishing a limited public profile. The simple side of this equation consists in developing and maintaining a personal website and set of appropriate social media channels. These are simple but effective ways of making one’s story available to third parties in the public sphere and equipping oneself with the means to react quickly to any information which is published to the contrary.

The other side of the equation is more complex. It involves developing earned coverage over time, as well as earning the right and ability to speak to the right media, at the right time, in order to hone one’s message to key audiences.

This in turn requires building trusted relationships. Unfortunately, there are no shortcuts to this end or silver bullets to be leveraged. The media know the difference between authentic pursuits and publicity stunts.

This is why it is indispensable to have a purpose-driven agenda. While this might sound like a cliché or a tautology, the long-term reputational value of orienting one’s business and public life according to a set of clearly stated social and ethical priorities cannot be overestimated. No man is an island, and it is a fact of life – rather than a political perspective – that the wealthy owe a debt to wider society.

The concept of ‘ESG’ (Environmental, Social, and Corporate Governance), albeit now wildly overused and often misapplied, nevertheless represents an important blueprint through which leading companies and HNWI can seek to recalibrate their personal and business priorities.

It is crucial to start asking oneself the toughest questions. What are the broadest and harshest criticisms that could reasonably be leveled against me and my business from an ethical perspective? How will these change and evolve over the course of the next decade? And what can I do now to mitigate against these?  

The matter of what social and cultural space one should seek to occupy in this regard cannot be separated from the question of what timeframe should be envisioned in undertaking these activities.  The gold standard must aspire towards an inter-generational approach. For all the reasons outlined, from a reputational perspective, our world is one in which the sins of the father will increasingly be passed on to the son.

Long-term success requires a collective effort from disparate arms of a family or business, dedicated to reconciling conflicts of vision and finding a common theme amongst a variation of ideas. Harmony doesn’t happen overnight, and it is incumbent on trusted advisors to facilitate transitions that can be difficult or even uncomfortable at first.

Setting oneself on the right track however is rarely a source of regret in later years. The future is always foggy. When we look back at our paths, we are able to see our tracks, but no longer the fog. Actively managing one’s reputation is simply about charting the road ahead in the knowledge that nobody walks under a sky that is always blue.