No matter how serious the incident may be, or the amount of money involved, a case of internal fraud can be highly damaging for any business. Not only might the loss of company funds due to the deception cause temporary but severe cash flow problems, it can also have a devastating impact on trust in the firm’s administration and reliability among its stakeholders. In addition to making customers reluctant to buy into the brand, investors and creditors may think twice about bankrolling future company development projects, and employees’ faith in their colleagues may be shaken, hurting productivity. All of this has the potential to stunt the company’s growth potential for a long time to come.
In the aftermath of an investigation, then, it is vital that the firm does everything it can to reform internal processes and build safety measures to prevent fraud incidents from ever happening again, and does so as quickly as possible. However, it is not enough to simply put these safeguards in place, the company has to inform its stakeholders of what steps have been taken and how they will work in the future to rebuild their trust in the business.
Honesty is the best policy here, so it is important to acknowledge the context surrounding the changes that have been made to reassure everyone involved that the correct preventative measures are now in place. As employees will be most affected by the amendments, and will most likely have to put them into practice, it is vital to talk to them first. By doing this in person, company owners can help encourage staff to buy into the new procedures, begin to rebuild relations between the management and the rest of the team, and get productivity back on track. Communications advisers can help owners to achieve this through training and the development of a specialised internal communications programme. This can be used to disseminate the finer details about how everything will work at a later date.
Once the changes have been communicated to employees, the firm should waste no time in informing external stakeholders. The longer the company takes before doing this, the more difficult it will be to rehabilitate its image in the wider community. As with employees, the company’s owners should talk to investors and creditors personally, if at all possible, to demonstrate to them that the management is committed to preventing fraud, and capable of doing so. Customers can be informed by direct mail, if their addresses are known, or through a public relations (PR) campaign designed to rebuild consumer trust. Again, it is important to make use of dedicated communications advisers to develop the right strategy to achieve this.
Regardless of the severity of the fraud, the effect on a company’s reputation cannot be overstated. However, the firm should not despair, as it is possible to revive its image in the eyes of stakeholders, simply by taking action to minimise the risk of repeat offences and informing them of these efforts effectively. By talking to its communications advisers, company owners can develop the right strategy to rebuild its reputation among its employees, and among investors and end customers.
If you have any questions or would like more information please contact Sandy Lindsay at Tangerine PR.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.