A respected brand or reputation often takes years to build and involves substantial investment of time and capital. Once damaged, that reputation can take a similar amount of time and money to repair. The rise in online publishing and consumer television programmes, combined with the speed at which news appears and is shared online, can make the effects of an incorrect story devastating. Whilst reputation may be difficult to quantify on a balance sheet a damaged reputation will have an immediate and perhaps long-lasting effect on brand and share valuations.
Whether on TV, in print or via social networking sites, negative coverage can also undermine investor confidence in a deal and have an insidious effect on a share price.
Such negative coverage takes many forms, from well reasoned (and perhaps unobjectionable) debate on the true value of a company, to salacious reporting of impropriety by a senior employee or the scale of remuneration. Protecting stakeholder trust in the corporation and its officers is vital, particularly during a transaction. A corporation’s relationship with shareholders and a steady share price are among the keys to a successful float or deal.
Though we have been involved in much high-profile media litigation in recent years, we believe that prevention is better than cure. A decade ago, a media lawyer might meet corporate clients only after the publication of false and damaging information about the company. Today most corporate clients prefer us to work with them under the radar and without publicity, using the law to protect reputations without drawing attention to the issue.