Imagine: Major news outlets have just published damaging
allegations of serious and systemic misconduct by your business,
potentially resulting in significant losses by your customers. To
make matters worse, the regulators have come knocking.
On its face, your compliance officer believes there may be some
truth to the allegations. The corporate affairs team wants to get
ahead of the story and immediately issue an apology to all affected
customers. The lawyers are concerned that this would be admitting
liability. The Board and CEO are unsure what to do amidst this
crisis.
It is an understandable human trait to equate apologies with
admissions, as well as aim to minimise damage by denying or
ignoring apparent wrongdoing. However, in the regulatory world,
this instinct may only compound the consequences.
