The Aftermath of Communications and PR
According to recent research from the Copenhagen Business School, a company’s value and reputation can be severely damaged by any workplace misconduct allegations, specifically sexual harassment. There are serious consequences for sexual harassment victims, but also for business owners, investors, and managers as well, because these types of situations can quickly decrease a company’s market value.
According to the results of the Copenhagen Business School research, after reports of such harassment surface with the public, a company’s stock value drops by 1.5%, which is around $450 million in average impact for companies. The aftermath also has long-term consequences, as many companies that managed to float through a crisis still only ended up recovering just about half of the lost value.
The study from Copenhagen Business School looked at about 200 incidents, many of which happened within big, popular corporations, like Tesla, Disney, Google, Facebook, Amazon, Goldman Sachs, CBS, The New York Times, and many others that went through incidences during the #MeToo movement. The aftermath was even worse if a company’s CEO was involved in an incident, or if the situation received a lot of media coverage. This would result in a 6.5% drop in stock value.
The #MeToo movement existed years before it went viral in 2017, and these days, many people are focused on the comebacks of some perpetrators during that movement. In fact, when the movement was loudest during 2017, many individuals lost their platforms and were shunned by their followers and communities. However, some experts have stated that the movement is much more than people speaking out about their experiences, and that it should also be focused on the perpetrators taking responsibility for their actions, and figuring out how to change.
The road to recovery, for both companies and individuals, should be walked carefully. Many abusers have already attempted to return to their positions, only for people to claim that they were unfairly trying to re-establish their careers or positions Companies should try to own up to whatever happened, and make direct, specific, personal, and sincere apologies to any people who were harmed, and then look for redemption.
These types of situations are incredibly complex to navigate, which is why the recovery process can take years. The best way to go about them is completely preventing any misconduct from happening in the first place. This is done by having a preventive strategy for sexual harassment, because there are plenty of risks for the businesses as well in these types of situations, aside from the significant economic impact.
The numbers previously mentioned can justify any considerable effort and cost that businesses have to invest in preventing such situations from ever occurring in the first place, instead of suffering the consequences of a financial, business, and reputational impact.
