Minimise Reputation Risk by Complying with the Consumer Protection Act


Yesterday I had the opportunity to facilitate a workshop on Reputation Risk and the Consumer Protection Act at a conference held at the Indaba Hotel in Fourways, Johannesburg by the Intelligence Transfer Centre (http://www.intelligencetransferc.co.za/).

Not wanting to overdo the legalities of the Act itself (since that was covered by other speakers) I focused on the implications of this Act and its potential impact on the reputation of an organisation.

Since the audience consisted of mainly legal advisers, I focused on the court of legal opinion versus the court of public opinion.

What struck me in the interaction with the audience was the disconnect between the two. Obviously this act brings a number of difficulties to the table, but it seemed that the focus by companies is minimum legal compliance, i.e  doing only what is necessary in terms of the specifications of this Act.

The audience found it interesting when I showed them why the Act was promulgated in the first place, namely that it was because companies paid lip service to the reasonable expectations of the consumer stakeholder. The Act now codifies basic rights such as the right to safety, the right to not be taken unduly advantage of and so on.

j0382683In my presentation I also focused on the importance of having proper and tested product recall procedures, adequate product labelling, communicating in a crisis situation and I showed them how lack of compliance with this Act could be equated with the lack of commitment to show that you care about the consumer, could lead to public naming & shaming on top of penalties, an increase in lack of trust, a damaged Reputation and ultimately lead to an increase in unnecessary cost.

I also emphasised the point that an organisation will have to address the thinking processes in the company through increased awareness training of this Act and Consumer focused thinking training sessions.

What got me though, was the lack of understanding and preparation amongst the audience when I gave them a simple exercise to do:

Think about communicating about a defect to consumers. What would you need to have in place?

Granted the audience were mainly legal advisers, but they did not know where to start. They did not know where a strategic communications plan would start or end. I just hope that they do have skilled PR or Communications personnel in their companies, otherwise they will find themselves in a pickle over their lack of adequate communication when the time comes.

Ultimately this Act does pose Reputation Risk in that a lack of compliance or adherence to public opinion demands will raise questions about the ethics, values and practices in an organization.

In 2010 I will be assisting companies with this compliance by facilitating in –house workshops on the importance of the Consumer Protection Act. This compliance needs to be viewed as part of the Stakeholder Management processes of a company and should not just be seen as a Compliance issue to be handled by the Compliance Officer or Legal Advisers.

Advertisement: I do offer a Crisis Manager Toolkit that can be used by companies as part of their preparation for product recalls and other incidents. See https://deonbinneman.wordpress.com/toolkits/ for more information or contact me.

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