Your Reputation Depends on the Example You Set in the Decisions You Make

After the first COVID-19 wave and before the second wave, I had the chance to enjoy a nice lunch with a senior executive in a national health care company.

Although the executive lived and worked in Atlantic Canada, because of the company’s operations across the country, I expected that they were still travelling for business.

In fact, the executive told me, while they could have sought an exemption of the 14-day self-isolation requirement for work reasons, they opted not to.

The company was generally operating remotely, so there really wasn’t a need for the executive to travel.

More importantly, the executive considered the impact on his company’s reputation if his travel resulted in an inadvertent COVID-19 transmission.

How would people judge a leading health care company with a high-profile executive whose travel resulted in spread of the virus?

And how would their government partners feel about such an incident?

My chat with the executive came to mind as news reports exploded across Canada over the holidays about elected officials and senior staff travelling outside of the country for travel. Trips to sunny destinations that few would reasonably characterize as essential, while ordinary citizens were doing their part to stay at home to keep their neighbours safe.

Individuals and organizations are not going to be judged solely on whether they followed the rules.

They are going to be judged on whether they are respecting the reality that Canadians are facing thanks to COVID-19.

Travel, however, will be the least of reputational risks faced by organizations in 2021.

At the beginning of December, it came to light that 68 publicly traded companies paid out $5 billion dividends to its shareholders, while receiving more than $1 billion from Canadian taxpayers under the Canada Emergency Wage Subsidy.

As the subsidy program continues through the summer of 2021, expect companies receiving the subsidy to be further questioned – by media, politicians, activists and union leaders – about the fairness of, as described by corporate governance expert Richard Leblanc of York University, “Taxpayers… indirectly subsidizing payments to shareholders.”

The questions won’t stop there.

Many publicly traded companies will soon be getting ready for their annual meetings.  Management circulars will be sent to shareholders, including disclosures around executive compensation packages.

Companies that are getting a wage subsidy to keep people working will be challenged as to why executives should receive generous bonuses.

There will be some in the boardrooms who will say: “we will just take the media hit… we have to pay out these dividends for the long-term financial health of the company and/or offer these executive compensation packages to attract and retain top talent.”

Of course, there is some merit to these points.

But COVID-19 was supposed to be about “everyone being in this together” and shared sacrifice.

Companies that were prepared to accept taxpayer funds to subsidize their payroll are going to be held to a higher standard than usual.

They’ll be judged not just by citizens, but by the governments those citizens elect and those who advise elected officials and design programs and services.

Trust me, the next time a company goes knocking on the door of an elected official or senior public servant looking for favourable consideration by the government, don’t think that official won’t remember that the company thought it was a smart call to collect government handouts, only to turn around and deliver payouts to shareholders and executives.

Your reputation depends on the decisions you’re making now.