Ways for Businesses to Avoid Legal and Reputational Risks
Jan 01, 2024 09:13 PM EST
Even if you do your best, it is impossible to avoid every risk that could lead to a reputational or legal crisis. Being proactive and preparing for potential crises instead of waiting until the last minute can help you respond in the best way. While you may be tempted to look for a quick solution, it is better to remain focused.
Use Telematics to Increase Safety
Fleet accidents are more common than you might think, and they can leave you open to litigation and damage your reputation, especially if anyone is injured. Luckily, you can use fleet management tools like AI dash cams to improve driver behavior while they are on the road. These cameras are available for use inside and outside the cab, and they can help you see where you should focus training efforts. You can learn more about how tools like Samsara dash cams can lower costs and keep drivers safe.
Be More Proactive
Having a plan to respond to a crisis will help you avoid acting while your emotions are getting the better of you. Crisis planning means you may end up handling the situation better, which can lead to better media coverage and a more positive impression of your business. Scrambling to react will make it harder to deal with the issue. Part of being proactive requires you to understand how to recognize issues when they occur. Reputation problems can differ depending on the business, so it's a good idea to look at a few common factors. Perhaps a stakeholder is experiencing an issue, and the backlash might negatively affect your company. Not being able to recognize a reputational issue can deplete your resources, and when you are reacting instead of being proactive, you will end up losing valuable time.
Uphold Ethical Standards
Many businesses have had scandals arising from ethical lapses. You can set clear policies and practices to ensure you avoid this area of risk. Review your company's handbook to make sure there is a code of conduct for employees to follow. Are they allowed to accept gifts from clients, and if so, how much?
Think Before Making Statements
In some cases, giving the wrong statement is worse than not saying anything. If you can respond properly, both the public and your clients will notice. On the other hand, stumbling over the right thing to say will only make the situation worse. Instead, work with your public relations team and legal counsel to consider each statement carefully. Concise messaging will help you avoid having to justify your statements later. This will help you build a trusting relationship with your clients because they will grow to understand that you mean what you say.
Understand Financial Consequences
A crisis usually results in delayed progress, and this can impact everything from service and product demand to time spent fulfilling client orders. Even after the media attention is over, there may still be long-term costs for the business to deal with. Your reputation also impacts your market value, and stakeholders often place a great deal of value on it. If you do not have business insurance, this is a great time to get it. Ask them if they cover losses related to your business reputation. Coverage is usually related to more tangible lost revenue, but negative growth, stalled projects, and lost trust can all take indirect tolls on your revenue.
Evaluate Expectations
Think about business expectations and ensure they are communicated to employees, clients, and stakeholders. It is risky to your reputation if you set certain expectations but do not meet them. If you find you are unable to meet a customer's needs, change their expectations as soon as you know. This can help you keep them as realistic as possible. It's also a good idea to regularly meet with your team about company goals so you can discuss how you will achieve them. This can help you be ready to change whenever necessary.
