Reputation damage is often a serious end result that in many cases could have been prevented by effective due diligence to manage or mitigate increased risk factors.
Business intelligence gained from effective due diligence investigations can help your company avoid or mitigate reputational issues.
Reputational damage can result in:
Recovering from reputation damage is lengthy and often very costly.
Infortal can help your company to understand hidden risks as well as identify areas of potential risk exposure on key executives, client relationships, business transactions, M&A Deals, and when onboarding new vendors and subcontractors.
In today’s business world, your company’s reputation is everything. Any damage to your reputation could result in losing customers and business partners, which in turn means losing profits. It can also result in current employees leaving and fewer applications for your open positions. As your company spirals, bleeding customers and employees, it becomes harder and harder to get back on track.
While there are some ways of repairing your company’s reputation over time, the best method of keeping your reputation intact is protecting it via proactive corporate due diligence. That’s the goal of Infortal’s reputation risk management solutions. We provide you with the information you need to weigh the various risks a decision involves and how those risks could impact your reputation. Better knowledge of your key executives, business partners, supply chain partners, and new board members makes a significant difference. With this information on hand, you can make a more informed business decision.
When you hire a new executive or C-suite employee, enter into a new business partnership, or even become a party in a large transaction, you put your company’s reputation at risk. You have already conducted legal and financial due diligence, but what are you doing to protect your hard-won business from criminals and fraudsters that will damage your business from the inside? This is the human intelligence side that needs to be carefully checked as most issues cannot be found during routine background checks. Background checks find fewer than 1% of serious issues, compared to 20% of serious issues found in due diligence investigations. This risk may potentially lead to a situation that leaves your company skirting laws or on the edge of bankruptcy. Because of this, it is vital that your company leadership fully understands what kind of risk you’re facing and what you could potentially do to mitigate or reduce that risk.
Reputation risk management is about looking at potential outcomes. Say, for example, that your leading CFO candidate was named in an SEC investigation. If the investigation had to do with potential wrongdoings s/he was directly involved in, your reputation could be hurt simply by hiring this individual. Beyond that, there’s the risk that s/he could continue to disregard SEC regulations or take other actions that lead to your company being investigated.
However, if s/he incurred serious penalties due to a violation of federal regulations or through other activities, it would be difficult to explain to your board, shareholders or regulators why you did not find this information in advance of hiring the CFO.
A situation like this occurred recently at Moderna, widely known recently for its effective Covid vaccines. In mid-2022 Moderna hired a CFO and had to fire him only one day later due to accounting irregularities at his prior employer, at a cost of $700,000 for his salary alone, plus a stock price drop, and serious PR issue, not to mention the cost of having to replace a senior executive. This type of reputation damage was entirely preventable.
The risk here is that the person may continue what they were doing at your company or others may feel that you’re bringing on someone who is a liability. This can lead to a number of outcomes that could damage your company and its reputation. At Infortal, we find the information you need to know in order to make a well informed decision to protect your company.
our company’s reputation is essential for attracting customers, potential new employee hires, business partners, vendors, marketing opportunities, and more. With a positive reputation, your business will have better opportunities to grow and expand. With a negative reputation, however, you may find new opportunities are few and far between. A negative reputation may also cause your customer base to shrink and force you to scale back your plans. Even nonprofits and government organizations that aren’t focused on profits can still be damaged by a negative reputation. Losing the general public’s trust can be very damaging to these organizations for many years. Think of a non-profit that has experienced a sexual harassment scandal, embezzlement or fraud by its leadership; would you donate money to them without knowing whether action was taken to remedy the situation?
When you hire a new executive or enter into a new partnership with another business, you’re joining your reputation to theirs. This is why doing your due diligence and learning about their past is so important. You don’t want to be associated with someone who has a criminal past or is known for producing poor-quality products or damaged services. Doing so can give you a reputation for chasing profits by working with companies known for cheating their customers. Hiring an executive who has charges of harassment can give you a reputation for hiring the wrong people, which will make it harder to retain and hire quality employees and promote having a great corporate culture.
If your reputation does take a hit, repairing it can be incredibly challenging. While you can issue a public apology, make charitable donations, and begin a new marketing campaign, these actions don’t instantly erase the damage done.
The internet makes it extremely difficult to completely erase the damage to your reputation. Before everything was online, old newspaper articles and television exposes were often the only way to research events. While the risk you took and its outcome may have been the subject of multiple articles and may have even made national news, the spotlight was fleeting. Those stories couldn’t easily be dredged up again and shared online with thousands of people.
That’s no longer the case with online archives and social media. Everything from inappropriate tweets to civil or criminal records can be found and shared readily. This means protecting your reputation is even more vital now because any potential stain on your name or your corporation can live online.
Infortal is here to assist you with corporate due diligence on potential new executive hires, business partners, and any others you will be tying your reputation to. Our due diligence investigations focus on the human side of due diligence in business, our process goes far beyond a background check that many companies think is sufficient due diligence. It is not sufficient to identify and prevent most of the issues that arise at executive levels. While basic background checks may be fine for regular employees, they are not significant enough for executives and others who will be representing your company. Databases do not reveal the information needed at this level either. For these individuals, you need to know more.
Our open-source investigations look into the dark web, deep web and historical web searches. These turn up much more than a standard Google search. For more information on our approach please see our executive due diligence page.
After completing these searches, we present you with our findings. You can then determine if hiring the individual is worth the risk or not; the decision is yours. We always give context to the data to help make the decision easier. The more information you have, the better decisions you can make, and we provide you with everything relevant to make a better informed business decision.
We conduct a similar type of comprehensive due diligence checks for potential business partners and in mergers & acquisitions (M&A). We also can perform due diligence investigations on new board of directors, C-suite leaders, and others whose actions could affect your reputation.
More companies today perform proper deep due diligence investigations on executives or potential business partners. With over 37 years of experience, Infortal can help your company to understand hidden risks and identify areas of potential risk exposure on key executives, client relationships, business transactions, M&A deals, and when onboarding new vendors and subcontractors in your corporate supply chain partnerships.
Our due diligence investigations help you understand fraud, bribery and corruption issues so your organization can avoid unnecessary risk exposures.
Protecting your corporation’s Board of Directors, shareholders and employees are part of key risk mitigation strategy.
Infortal has screened workforces for Fortune 100 companies, banks, law firms for 30 years including nationwide and international hires.