Successful Recovery from Reputational Crises: Legitimate versus Illegitimate Risk Case Studies

Steffen Bunnenberg

INTRODUCTION

This chapter will give you the tools necessary to recognise and handle crises of reputation correctly. In this matter it is of the utmost importance to understand how such crises work and what their origins and sources are. We are going to take a look not only at the reputational crises concerning banks specifically, but also at those affecting other industries that are in that way assignable to the banking industry. That is the only way to learn the right response for future reputational crises.

After a private testing institute rates a financial service provider’s performance as inadequate, although it does not even offer the services in question, the sales plummet. Discontented customers, laid-off staff and disguised competitors converge on evaluation websites and blogs. And, in the spirit of the financial crisis, the established press gladly investigates banks, their providers and the wealthy as soft targets in any envy-fuelled debate, or lets itself be exploited by a competitor, selling commissioned studies under the guise of freedom of speech that praise the sponsor and denigrate the rival.

Banks, their associates and the wealthy fear for their reputation, and