Financial institutions and other large corporations should be very afraid of cellphones. Putting a powerful media tool in the hands of the general public is scary for many reasons but perhaps none so painfully clear as corporate public relations.
Ask Olivier Desbarres. Until last month Oliver was the head of FX strategy for Asia Pacific excluding Japan at Barclays in Singapore. Oliver was filmed on a cell phone berating construction workers at a work site next to his home in Singapore. The video shows Oliver in shorts and slippers hurling expletives and making threats against the workmen. Barclays dismissed Desbarres police are investigating charges, and neither he nor Barclays has commented on the video.
This Affects You
But one angry trader is not the story here. Every employee now represents a potential PR nightmare for companies and particularly high-profile financial institutions. Before the prevalence of cellphone video technology, bad behavior by an employee might result in a line or two in a newspaper or journal, rarely making an interesting enough story to appear on televised news. However, the internet combined with millions of small video cameras watching potentially every public outburst means that any employee that creates an interesting or violent or amusing spectacle has the potential to go viral. Millions have now seen this one trader’s behavior, shot on a cheap cellphone.
Let’s be clear. I love my iPhone. During Hurricane Sandy I was able to film video and immediately post on Facebook to keep my family members aware of what was happening. They in turn reposted the video. Within hours people I had never met were viewing my video around the world. The speed with which images and words can now fly around the internet and reach unimaginable numbers of viewers is staggering.
What to Do?
So how does a financial institution protect against the risk that one of its employees will wind up on the wrong end of a viral video? I don’t know. Reputational risk insurance is still in its infancy and is largely designed for events that could cripple a company or ravage its stock price. Until underwriters determine how to evaluate the risks associated with ill-behaved employees and cell phones with HD video recording, firms need to prepare for the eventuality that staff may be caught acting in inappropriate ways on camera.. This may mean a toughening of ethics clauses in employment contracts or better sensitivity training for new employees.
For now, cheap cellphones are now the source some very expensive reputational risks.