Credit Suisse could not ride the perfect storm
Modern Times…old style approaches to Governance may not stand the test of new set of expectations. Improving risk management and communication is essential in volatile times.
In my lifelong experience with crisis management and communications there are two fundamental forces that can break and bring down a company.
- First, if a company has a repeated set of issues, it weakens itself to the degree that it cannot ride off the perfect storm. This is a matter of governance, management, values and ultimately character. Areas that we work on every day and that you effectively can fix.
- Second, when you are facing a “perfect storm”, as per definition “an extremely bad situation in which many bad things happen at the same time”. Simply, there are forces outside of your control that may be greater than those you can control.
When lack of character meets perfect storm then you have a disaster. This is exactly what happened with Credit Suisse.
Due to years of reputational lack-of-character led issues they did not have the resilience to ride off a perfect storm caused by increasing interest rates and a totally unrelated fall of the Silicon Valley Bank.
A few hours before we could watch the details unfold on Swiss TV at 19:30 CET on Sunday March 19 I was talking to my good friend and neighbor, who is a senior manager with UBS, and like me he was wondering how his start of the week would be.
“Banking is a trust business”, he said, and he is so right.
If we analyze the evolution of both the Credit Suisse and the Silicon Valley Bank, we will see how lack of trust played a detrimental role in their downfall. They failed to communicate effectively with the customers who took a run on them. They also failed in transparency and setting the right expectations. They failed in Governance.
Both Silicon Valley Bank and Credit Suisse are interesting case studies when it comes to broader and more fundamental approaches to transparency and ESG. They also are worth reflecting on when it comes to how not to do Reputation Management and Risk Communication. ESG is today fundamental – and both banks demonstrated how flawed governance is disastrous.
A Guide to Reputation Management & Risk Communications
Risk is increasingly a reputational matter, something that is being widely discussed in the latest eBook from Levick, our close partner in the USA – we recommend to download and read this guide.
Here Levick sheds light on:
How do we adapt and thrive in the “new normal,” with all of its dynamic challenges and ever-changing global threats — and to do so with your brand, reputation, goodwill, operations, finances and culture intact? That is what is expected by shareholders, investors, employees, business partners, regulators, the communities in which you operate and the public at large. Against the current backdrop of geopolitical upheaval, cyber and ransomware attacks, data breaches, global pandemics and natural disasters, severe supply chain disruption, the emergence of ESG and the rise of stakeholder (investor, employee and consumer) activism, economic uncertainty and labor unrest, the spread and persistence of disinformation and the participation of various social media platforms, among others, as accelerants, it has become a fundamental notion and expectation of corporate governance and stewardship for business managers to be less reactive, and more predictive, preventative and proactive.
CEO, based in Geneva
Rolf Olsen launched Leidar in 2010 and continues to lead the company as CEO. He advises clients on strategy and narrative development; crisis management; and complex reputational issues on a global scale.