“How will admitting to negligence and misconduct, as well as a historic $4.5 billion settlement impact the brand?” is a natural question on the heels of breaking news about a global brand of the scale of BP. Tom Zara, Global Practice Leader for Corporate Citizenship at Interbrand, contends, though, “Everybody’s focusing on the wrong thing.”
While the penalty against the brand is unprecedented and something of this magnitude has not happened to their competitors, the question is not will people stop buying BP, in fact at the end of last month the company announced a higher quarterly dividend and while fourth quarter profits slipped, BP's share price has climbed around 57% since April 2010. So Zara suggests, the question is, “What are they doing to ensure it never happens again?”
“Good corporate citizenship and responsible crisis management means that a company can’t hide critical information simply because it fears the backlash,” says Robert Khuzami, Director of the US Securities and Exchange Commission’s (SEC) Division of Enforcement in a Department of Justice Press Release issued today. What has BP done to redefine itself so there aren’t future lapses in values?
This is the time, Zara says, for the brand to look at its own “ethical bone structure,” to look within to assess what they have done to be sure “their culture, operations and governance have embraced new brand values. This is an opportunity to affirm internally what their values are.”
The key to overcoming this latest blow to its brand image Zara notes is more than taking its lumps in the form of fines and accepting guilt. “Tenets that guide behavior must be in place with a commitment to safety, accountability and responsibility,” he says. “The answer people are really looking for is to what degree have they demonstrated these key values.”
BP worked hard to craft an image of itself before the Gulf Spill as “Beyond Petroleum” and since 2010 has promoted tourism in the impacted region and sought to leverage its sponsorship of the London Olympics to improve its reputation. Now the company says it will appoint a safety and risk-management in the Gulf of Mexico and an ethics monitor to examine the brand’s code of conduct, implementation and enforcement.
“The explosion of the rig was a disaster that resulted from BP’s culture of privileging profit over prudence,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division in the DOJ release. “We hope that BP's acknowledgment of its misconduct – through its agreement to plead guilty to 11 counts of felony manslaughter – brings some measure of justice to the family members of the people who died on board the rig.”
Zara warns, “Notoriety of criminality isn’t the death knell of a brand, but corruption of culture will kill the brand."