MISSION INTANGIBLE

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MISSION:INTANGIBLE, the blog of the Intangible Asset Finance Society, offers critical comments on intangible asset, corporate reputation, and finance; supplemented by quantitative reputation metrics. Intangible assets include business processes, patents, trademarks; reputations for ethics and integrity; quality, safety, sustainability, security, and resilience; and comprise 70% of the average company's value. MISSION:INTANGIBLE is a registered trademark of the Intangible Asset Finance Society.

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Fleeing Clients Indicate Reputational Damage

C. HUYGENS - Wednesday, September 20, 2017
KPMG and McKinsey have scrambled to limit the damage caused by their links to the Gupta family, which is at the center of South Africa’s worst political scandal since the apartheid era.

“KPMG on Tuesday lost two further audit contracts in South Africa and faced widespread reviews as clients sought to distance themselves from reputational damage from their links to the firm. McKinsey faced allegations of fraud and collusion in corruption from South Africa’s main opposition party over the management consultant’s work with a company linked to the Guptas, the family accused of corrupting state contracts through ties to President Jacob Zuma.”

Read more in Financial Times.

Peak Bloodlust: Now it's McKinsey

C. HUYGENS - Wednesday, September 13, 2017
Activists target McKinsey over South African ethics issues. The scandal surrounding the country’s controversial Gupta business family that destroyed UK PR firm Bell Pottinger and is brushing against KPMG continues to spread to international firms.:

“Corruption Watch, a non-government organisation in South Africa, said it plans to approach anti-bribery prosecutors at the US Department of Justice within the next two weeks to ask them to investigate McKinsey’s work with Gupta-linked entities.”

Read more in Financial Times.

Smelling Blood, Activists Target Another Professional Services Firm

C. HUYGENS - Tuesday, September 12, 2017
Activists target KPMG over South African ethics issues. Response:

“We’re determined to rebuild the public’s trust in KPMG’s South African firm, and will stand behind the firm and will work with it for as long as it takes…”

Read more in Financial Times.

Fund Reputation For Sexual Harassment A Liability

C. HUYGENS - Monday, September 11, 2017
Investors seek to avoid funds whose GP’s sexually harass prospect & portfolio company executives.

"The Institutional Limited Partners Association is aiming to help investors avoid funds where this has taken place, with improved detection of any past harassment incidents during the due diligence process."

Read more in Financial Times.

Unrealistic Expectations Create Risk of Earnings Torpedo

C. HUYGENS - Saturday, September 09, 2017
A reminder of the value of corporate governance and prompt candid disclosure of bad news especially when expectations are unrealistic.

“…the longer a company takes to come clean, the bigger and more damaging the ‘earnings torpedo’ that hits its share price and its reputation once the true numbers come out.”

Read more in Financial Times.

Ethics Scandal Wipes Out Another Professional Services Firm

C. HUYGENS - Friday, September 08, 2017
PR agency Bell Pottinger loses fight to retain clients and salvage its reputation; ethics scandal sends UK arm into administration.

“In a damning report, the Public Relations and Communications Association concluded that its messaging for the Guptas targeted wealthy white individuals and corporates in South Africa and was likely to inflame racial tensions. Since Monday, a host of big name clients and companies have sought to distance themselves from Bell Pottinger with HSBC, TalkTalk and Ascential joining luxury brands group Richemont and Investec in publicly abandoning the firm.”

Read more in Financial Times.

Headline-Sourced Reputation Risk

C. HUYGENS - Wednesday, August 23, 2017
“We’re in the era of weaponized social media….Companies need to set clear expectations of what (behavior) is acceptable.”

“Companies need to communicate with stakeholders about the values embedded in their corporate culture and set clear expectations of what is acceptable and what is not. In the current political climate, companies should have been considering this question all along, not just waiting for (Charlottesville) to stimulate that discussion. ”

Read more in Business Insurance.

Industry Under Siege (No, its not banking)

C. HUYGENS - Wednesday, August 09, 2017
“When commentators routinely compare Silicon Valley today with the arrogance, isolation and destructive might of Wall Street before the crash 10 years ago this week, it is time to start thinking about reputation — and what might ensue when the glamorous superficial allure of these tech giants wears off.”

Read more in the Financial Times.

Reputation Risk Due to Ethical Controls Failure

C. HUYGENS - Monday, July 31, 2017
Germany's big three groups, Volkswagen, Daimler and BMW, and VW units Porsche and Audi have been accused of holding secret meetings and colluding on technology. There are controls to prevent such ethical breaches. How can they fail?

“German managers are less aware of the financial consequences of wrongdoing than their US counterparts,” she says. There is less of a recognition that fines imposed by regulators for lawbreaking “can sometimes be so big they can ruin the company”.

Read more in the Financial Times.

Crisis Communicator Creates Reputational Crisis

C. HUYGENS - Sunday, July 09, 2017
Crisis communicator culpable for reputational crisis with false news stirring up racial tensions. It is a question of ethics.

“Much of what has been alleged about our work is, we believe, not true — but enough of it is to be of deep concern,” Mr Henderson (Bell Pottinger’s CEO) added. “These activities should never have been undertaken.”

Read more in the Financial Times.

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