Picture this. The boardroom of the regional Asian headquarters of a major multinational in Singapore, Hong Kong, Shanghai or Tokyo. Two sets of executives are locked in fierce debate. On one side of the conversation, the local leadership and their communications team. On the other side, sits global leadership, legal counsel and global corporate communications teams. They are debating a public statement about a reputational issue embroiling their firm. For stakeholders sitting outside the region, any language that hints at a direct apology may trigger handwringing and teeth grinding. For those in-market however, the often, terse legalese drafted from head office has the same effect. The crux of the issue, legal culpability and liability.
Litigation or Redemption?
For stakeholders in highly litigious markets like the U.S, any public expression of apology sets off sirens of alarm with concerns of class-action lawsuits and litigation obstacles to follow.
For Executives in Japan, for example, the stakes are equally as high. They know that unless they express some form of apology, their key stakeholders in Japan—from national government to customers —may censure them for not sincerely acknowledging the disruption they have caused. They instinctively know that to conform to Japanese business culture, issuing a public apology in is a key part of the process in getting past a serious issue.
The Sound of Silence
There is no substitute for good corporate responsibility and doing the right thing to address issues that arise. However, the absence of an apology can also lead to further escalation and reduce room for the company to effectively work with relevant parties to resolve the issue. Thus, both sides share the common understanding that the company’s reputation hangs on how it handles and communicates its response to the issue.
Equally global and local leaders agree there is a short window of opportunity to engage when public opinion is being formed. Yet, because of these different points of view on saying “sorry” there is often internal stand-off and impasse. Instead of speaking up to share the Company’s side of the story, multinationals under fire in Asia are often deadlocked and silent.
Not the Hardest Word
There are ways to navigate this impasse. And they do involve an apology. But a special kind of apology which expresses regret for the concern or disquiet caused to key stakeholders, rather than addressing the specifics of the issue. Japan's unique approach to apologies allows companies to express remorse without automatically admitting fault or liability. This is embodied in the Japanese concept of 'shazai', where an apology aims to restore harmony and express sincerity without the direct implications of wrongdoing. Hong Kong has also adopted a similar stance through its Apology Ordinance. This legislation allows individuals and companies to make apologies that cannot be used as an admission of fault or liability in civil proceedings. The ordinance encourages parties to communicate openly and to de-escalate the emotional elements of the issue.
China, India
In markets such as mainland China and India, there isn't a clear legal framework which distinguishes an apology from an admission of guilt. In mainland China, traditional culture values the act of apologising to maintain harmony across stakeholder groups. While there are no specific legal considerations, it is generally understood an apology made in the right way does not constitute an admission of fault. Furthermore, authorities and regulators under these environments often play the role of mediators and may encourage companies to make an apology to preserve stability. In these instances, a different approach will need to be taken that carefully balances the need for de-escalation with legal risk and wider global stakeholder expectations.
One Size Does Not Fit All
In many cases, after intense internal negotiation and with the advice of risk and communications professionals, multinational companies will eventually agree to this nuanced approach. However, the long delay between an issue coming into the public domain and an apologetic statement being issued often leads to greater reputational damage.
For multinational companies, the takeaway is that a ‘one size fits all’ approach cannot be taken in Asia. That is why we at Edelman advise our clients to build these conversations into routine risk mitigation planning and adopt a culture of reputation management within the business. Touchpoints might be an annual update of the crisis communications playbook or scenario planning.
Establishing a common understanding will empower your teams to act with confidence to protect your most valuable assets in this diverse and vibrant market – trust.
This story first appeared in The Business Times.
For more information, please contact Simon Chan, SVP, Technology Lead for APAC at Edelman.