3 Steps to Preventing a VW-style scandal

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Advice on how to keep your reputation intact

Serious reputational scandals can have a dramatic financial impact on the business, damaging share prices, leading to job losses, or, in the infamous case of jewellery company Ratner, almost leading to total collapse.

So what can companies do to prevent such a major issue from even taking place?

1. Value values

If the decisions of senior people break the values of a company, customer reactions can be catastrophic, feeling that their trust has been broken and they have been lied to.

All companies need to carry out in-depth due diligence on their top teams – at recruitment and promotion and throughout their tenure – to ensure that they have the right skills and, crucially, are a real cultural fit.

2. Look to the leaders

If senior leaders are not who they claim to be or do not have the experience to fulfill their role then the damage to reputation and company performance can be immense.

This can be prevented by making sure that nobody is too senior to face a thorough recruitment process. In some companies this approach has for many years been taboo, but we are seeing more and more forward thinking companies carrying out enhanced levels of background screening, such as media checks, on senior hires and promotions. For many this is a key element of how they protect the brand that they work so hard to build.

3. Mind the gap

Without a consistent international process for hiring, people can fall through the gaps, at any level.

While they need to be adaptable to local needs, it’s vital that people from the top to the bottom of large organisations go through an appropriate amount of due diligence before allowing them access to valuable data, intellectual property, financial information or even your customers.

Read our in-depth piece on the topic for the Institute of Leadership & Management here: VW’s road to recovery: Can businesses bounce back from scandal?

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The HireRight Blog is provided for informational purposes only and should not be construed as legal advice. Any statutes or laws cited in this article should be read in their entirety. If you or your customers have questions concerning compliance and obligations under United States or International laws or regulations, we suggest that you address these directly with your legal department or outside counsel.

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