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Will Your Tone at the Bottom Impact Shareholder Value?

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Published on May 23, 2017

Host: TK Kerstetter
Guest: Associate Professor, Governance, Law & Ethics, York University

If we’ve learned anything from the recent news coverage of Wells Fargo or United Airlines, it’s that a poor sales practice or even a single tweet can wreak great reputational havoc on a corporation. Boards and management, who have long focused on “tone at the top,” must now shift their attention to think about “tone at the bottom” (a phrase originally coined by Dr. Larry Taylor: http://www.tone-at-the-bottom.com/). What kind of customer interactions or cultural practices could put the company at risk?

To tackle this important topic, we’re joined by Dr. Richard Leblanc (professor, lawyer, governance expert, and author of the recently released The Handbook of Board Governance).

“Traditionally, boards have been structured to get all of their information from the CEO," said Leblanc. "Now with social media...anybody can put the reputation of your company at risk in ten minutes.”

Today’s environment necessitates that boards are prepared to respond when things go bad, which can happen quickly in this digital world. Whether it’s a social media incident or a recently discovered cyber attack, boards must have have crisis plan in place that outlines “who does what & when” so they can keep reputational damage at a minimum. In this episode, we cover:

(1) What is tone at the bottom? What is the board’s role in mitigating reputational risk?
(2) What crisis planning best practices should today’s boards be focusing on?
(3) How can boards use executive pay structure to influence ‘the tone’ at all levels of the corporate hierarchy?

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