By Fergus Lynch, Account Director
With the dust having (almost) settled since Nigel Farage shook the foundations of the banking world over the closure of his Coutts bank account, I've pulled together some key lessons from what no doubt will go down as a masterclass of how not to do crisis comms.
Lesson 1 – Silence isn’t golden
When Coutts decided to close Farage’s account, it pitted itself against one of the most skilful media operators of his generation; a man who can command headlines and front pages like few others. Coutts must have known that as soon as he was “debanked”, he would go on the attack. And it was totally unprepared.
When the story broke, not only did Coutts refuse to comment, but it also didn’t appear to brief journalists “on background”, to give some context to the story. Omertàmight have worked for the mafia, but staying resolutely silent left a vacuum where Coutts should have been proactively telling its side of the story and countering negative reporting.
Lesson 2 – Remember Richard Nixon
Five days after Farage announced his debanking, Simon Jack, BBC Business Editor, tweeted that a senior source at Coutts had told him that Farage had fallen below the level of wealth required to have an account with Coutts. That senior source was Dame Alison Rose, NatWest Group CEO, and that explanation was swiftly debunked.
Spreading a false explanation to the media and revealing confidential information about a customer opened a new front in the crisis. It brought more reputational damage to the NatWest Group and ended Rose’s career at the company. As Richard Nixon learnt during the Watergate scandal, sometimes the cover-up can do as much damage as the crime.
Communicating with transparency and honesty during a crisis may often seem counter-intuitive, and even bring some short-term pain, but it is often the most effective way to minimise long-term reputational harm and keep the media focused on the key issue.
Lesson 3 – Balancing views and values.
Coutts’ staff concluded in an internal report that Farage’s views were “at odds with our position as an inclusive organisation”. This raised the spectre of “cancel culture”, that Farage may have been denied banking services because his views made the Coutts leadership uncomfortable.
This episode demonstrates the difficult balance that corporate leadership teams must strike. In the aftermath of movements like Black Lives Matter and #MeToo, there is greater pressure than ever on businesses to uphold progressive social values. To some staff within these businesses, this might mean not doing business with the likes of Farage, whose views they may find unsavoury or even abhorrent.
But it raises the question of where a business should draw the line between being an inclusive organisation and upholding its corporate values and those of its staff, and not discriminating against people because of their political, social or cultural views?
Wherever a business lands on this issue, they must communicate a clear, reasonable, and consistent position on the issue. They will likely still receive criticism, because it seems no brand can escape a media/social media storm (even if they are often teacup-sized). But a considered and nuanced policy which is communicated transparently is likely to reduce long-term reputational risk, rather than one made up during a crisis and hidden from public view.