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The reputational impact of a criminal investigation

Businesses that are facing a criminal investigation will have a range of concerns and worries, including the impact this could have on their reputation. The investigation can affect credibility, loyalty, relationships, client trust as well as the career, future job prospects and earning potential of individuals within the business that can be far-reaching. This is why it is so important to make sure that you have specialist reputation lawyers that can ensure the best outcome for your case and minimise any damage to your reputation. 

The impact of social media 

Any criminal investigation has the potential to cause fairly significant reputational damage to those involved. This can impact public opinion but also the internal reputation of the firm with relevant stakeholders. The prevalence of social media means that opinions and viewpoints around any criminal investigation can be far more wide-spread and also instantaneous.  

A business cannot ignore the information that is being circulated on social media and will need to ensure they have a robust and carefully planned strategy in relation to their communications around the issue. It is imperative to try to reduce the damage that can be caused financially and to the businesss reputation. 

Employees that are not involved in the investigation can still be very concerned about the possible impact. It can greatly reduce employee morale and performance and reduce loyalty to the business. This in turn can also lead employees to discussing the issues outside of the firm via social media. It is very important to talk to employees about their concerns and to encourage them to raise these with the relevant personnel within the firm as opposed to voicing them externally.  

How to limit reputational damage 

Taking proactive steps in relation to the handling of such a situation can minimise the impact that it has on the business. Criminal investigations can commence with little or no notice and it is important if this happens that employees do not discuss what has happened with anyone outside the firm. 

As soon as any indication is given that there may be an investigation, it is very important to get expert legal representation in relation to the investigation itself but also surrounding the protection of the businesss reputation. A difficult decision that can seem counter-intuitive is whether a business reveals that it is under investigation rather than waiting for someone else to do it. This can feel inappropriate but actually gives a business a sense of control and allows the facts to be carefully portrayed, rather than rumours that are less likely to be correct and more likely to cause more damage. Similarly, if the regulator or prosecutor announces the investigation, the matter cannot be managed in the same way since the business will have no control over the timings. The business will need to respond to such a disclosure to try and offer reassurance to relevant parties within and outside the firm. 

If the media discuss the investigation, then there are likely to be other issues to consider. The media disclosure could fall under defamation laws if the investigation is discussed but this does not lead to the business being prosecuted.  

Practical considerations 

Leaks 

The decision to reveal that an investigation is underway may be taken out of your hands if someone leaks the information (either to mainstream media or via social media). Leaks cannot be controlled or managed in the same way and information can be released that is potentially more damaging even if well-intentioned.  

Collate everything 

Ensuring that all documentation is collated and to hand will be imperative for the investigation itself but also will be key to managing your communication strategy both internally and externally. Statements, detailed timelines, relevant strategies and policies should all be collated and regularly reviewed and updated as the investigation progresses or develops. 

Keep communication channels open 

It is not just your public reputation that you will be concerned about. How shareholders, clients, customers, employees and other key stakeholders react to the news of an investigation is just as concerning and also needs careful management. It is vitally important that there is a consistent approach to the content that is being shared, be it internally or externally. If this is not done, then it may do even more damage since it can suggest dishonesty, which will not help the situation. 

The information on this website is intended as a guide and does not constitute legal advice. Vardags do not accept liability for any errors in the information on this website, nor any losses stemming from reliance upon the statements made herein. All articles and pages aim to reflect the legal position at time they were published, and may have been rendered obsolete by subsequent developments in the law. Should you require specialist advice, tailored to your situation, please see how Vardags can help you.

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