Anthony Hilton: Public will not allow moral bankruptcy

What the financial crisis told us was that no matter how powerful a global commercial bank appears to be, it is nothing if public confidence evaporates. This was something earlier generations understood well but we had forgotten it because until three years ago it had not been an issue in our lifetime. We know better now.

Anthony Hilton: Public will not allow moral bankruptcy
Anthony Hilton: Public will not allow moral bankruptcy

But the lesson still has to be learned elsewhere. It is too early to say whether News International is in its death throes but we are certainly witnessing the humbling and partial disintegration of a business that had seemed beyond challenge until just a few weeks ago.

In this case the issue is also about loss of confidence, but more specifically confidence destroyed by the loss of its reputation. A comms business without integrity is like a bank without confidence - it loses its licence to operate from the public.

I have no desire to diminish the crime of phone hacking but the interesting point is the way sentiment turned when the news broke that the phone of murdered teenager Millie Dowler had been hacked. As long as hacking was aimed at celebrities, the public did not get wound up about it. But once the line had been crossed, it unleashed a torrent of outrage.

Work published this week by academics at City University casts an interesting light on this. The fieldwork predated News International's woes but it looked at other companies crippled by reputational issues over the past decade or so, such as BP, Cadbury, Firestone, AIG, Airbus, Enron, and Arthur Andersen. What emerges is that conventional risk control metrics are no use in such circumstances because they are driven by numbers and rooted in process, whereas these disasters are largely cultural.

The defence against the company losing its way is good internal comms from the bottom up, and not just about numbers but about the 'soft' issues of style and shared values. Companies where boards get caught out are those where internal comms channels have been too focused on pushing messages down. Is this a job for the internal comms team? If not, then who?

Anthony Hilton is City commentator on London's Evening Standard

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