The Reputation Doctor’s Top 10 List of Predictions for Corporate Crisis Issues for 2007

By Mike Paul
The Reputation Doctor
January 13, 2007

PHOTO: SADLY, FRAUD IS STILL EVERYWHERE

NEW YORK - The following is Mike “The Reputation Doctor” Paul’s Predictions for Corporate Crisis Issues for 2007. This list is compiled by and solely the opinion of global reputation management expert Mike Paul, who is also a weekly guest in the media providing expert analysis of various reputations in crisis:

1. Corporate Fraud – Going back to the origin of sin with Adam and Eve (read Genesis in the Bible), we must be reminded that we as humans are flawed, commit sin and people are not perfect. Corporations are managed and staffed with people. As a result, corporate fraud committed by executives/people will continue to be a major crisis issue and concern for corporate reputation management for many years to come. We either lean on truth, transparency, accountability, humility and consistency in building honest, long-term corporate and personal reputations, or we lean on fraud, lying, deceit, breaking of the law, inflated egos and evil. I predict there will be many major stories in the news with leading corporations in crisis in 2007. The core crisis will involve inappropriate human behavior and illegal, immoral and unethical choices, which will have consequences.

2. Inappropriate CEO Compensation – Far too many CEOs have excessive salaries, bonuses and stock and most of their compensation is not “appropriately” tied to personal and corporation performance. Message to Top CEOs: Learn something from former Home Depot CEO Bob Nardelli and former NY Stock Exchange CEO Dick Grasso: there is a limit and if you have to ask how much is too much, your reputation will be at risk.

3. The Backdating of Stock Options – My firm is currently helping a corporate client with a major crisis in this area. Recently, Apple Computers joined the growing list of corporations with backdating of stock option crises. Look for these crises to damage the reputations of several other leading corporations and their top executives in 2007.

4. Lack of Transparency - Trust is the most important currency for a corporation and for any reputation. Without trust, a corporate will not have customers, employees, investors and suppliers. Corporate transparency equals corporate trust. Hiding activities, behavior, decisions and more from any of these key audiences is like corporate suicide. Need I say more? However, there are still many corporations too stubborn to embrace transparency. Look for many corporation to still be in crisis in 2007 due to a lack of transparency with many issues and activities.

5. Lack of Accountability – Corporate boards will be asked to step up to the plate more than ever in 2007. Investors are sick and tired of the lack of accountability corporations have had for so many years. They have learned to put more pressure on corporate board to protect their investment and protect the corporation’s reputation.

6. Poor Employee Benefits – One word: Wal-Mart. How corporations treat their employees is a growing concern because employees, unions and critics are making their voices heard in more ways than in the past. For example, the use of social media is changing how these internal crises are handled. As the cost of employee benefits continue to climb, corporations plan to continue to cut important benefits to employees and these cuts increase risk of corporate crises from disgruntled employees.

7. Blog Attacks – Blog attacks are coming not only from unhappy customers and non-employee critics. A blog by an employee or a former employee is as powerful as a story on CNN today. Learn something from the Wal-Mart crises. Your employees are your business and if they’re not happy, you put your entire corporate reputation at risk.

8. Tax Fraud – Tax fraud continue to be on the rise. In fact, in 2002, President George W. Bush established a Presidential Corporate Fraud Task Force and IRS Commissioner, Mark Everson, is a member. That task force is intended to provide direction for the investigation and prosecution of significant cases involving securities and accounting fraud, mail and wire fraud, money laundering and tax fraud. Most of the corporate fraud investigations are joint efforts involving many federal agencies.

9. Racial Crises – As long as we have "leaders" like Jesse Jackson and Al Sharpton and organizations like the NAACP, corporations better embrace diversity and fight racial discrimination in the workplace. These activists and organizations have mastered the power of media to hold corporations accountable for their actions. Look for racial crises to climb in corporate America in 2007 with Sharpton and Jackson exposing a few more crises.

10. Immoral and Inappropriate Sexual Behavior – Unfortunately, the days of the boom-boom room and other immoral and inappropriate sexual behavior by mostly men versus women are not over. Over the years, I have personally counseled several CEOs and corporate boards with these types of crises and more. Power and money corrupt the minds of corporate leaders and some male corporate leaders believe that entitles them to sex with any women within their organization and external to their organization. Many are learning the hard way that isn’t so. Do the right thing. Why? Because your reputation is everything!

Jay Leno quote: "First Enron, then Tyco and now WorldCom. How come all these companies are off billions in their accounting and nothing ever happens to them? If you bounce a $15 check at the Quickmart, the feds are at your door!"


PHOTO: Because Your Reputation Is Everything!

About Mike Paul

Mike Paul is editor of The Reputation Doctor blog. The Reputation Doctor is a nickname given to him by various clients he has counseled over the years. Mike's blog is located at www.ReputationDoctor.com. He appears regularly on Fox News Channel, CNN, MSNBC, Court TV, ABC News, ESPN, CBS News, BBC, and others as a weekly contributor and expert in the global news regarding CEOs, political leaders, celebrities, corporations and other organizations with reputations in crisis. Mr. Paul is also president and senior counselor of MGP & Associates PR (www.mgppr.com), a leading strategic public relations and reputation management firm based in New York. For interview requests, speeches, senior counseling or other business opportunities with Mr. Paul, call 212-595-8500 or email info@mgppr.com.