The Hong Kong Crisis: Reputation Issues for US companies

October 2019

Situational Overview
Hong Kong Special Administrative Region (SAR) has entered its fourth straight month of citywide protests against its government’s attempts to introduce an extradition bill between it and Mainland China. For many Americans, the impact of the situation on North American corporates became evident when the National Basketball Association (NBA) became embroiled in a controversy sparked by a tweet from the general manager of the Houston Rockets. Consumers, sponsors, and the Chinese government reacted negatively to the remarks, throwing the NBA’s relationship with one of its most important overseas markets into jeopardy.

This was far from the first instance of multinationals becoming embroiled in controversy around the Hong Kong protests. The below examples show how companies with seemingly little exposure to the Hong Kong situation have become gravely affected. Now, more than ever, it is incumbent upon corporate leaders and communicators to consider and prepare for reputational risks associated with this volatile situation.

Important Considerations
Companies that engage APAC audiences, aspire to do so, or that have other exposure are advised to take several steps to mitigate reputational risk:

• Implement specialized monitoring tailored to the needs of the business
  To fully understand the complexities of the situation, as well as its bearing on critical matters such as the safety of employees or business impact, instituting regular monitoring by a team with significant local insight is highly advised. Monitoring keeps corporate leadership constantly in-the-know and leads to more informed decision making.
• Undertake scenario/ contingency planning
  This is important first and foremost for the safety of any employees or stakeholders in Hong Kong who may be affected by various disruptions related to the situation [if applicable]. Additionally, mapping out potential scenarios (as well as actions and considerations associated with each) bolsters business preparedness and agility — especially when North American C-suites are asleep during business hours in Asia.
• Assess risk in APAC and global markets
  Risks associated with the Hong Kong protests are not limited to Hong Kong SAR or Mainland China. Companies may be exposed to criticism by internal or external audiences who feel strongly about the situation in other APAC markets such as Taiwan, or markets with large Chinese expatriate populations such as Canada or the US. In such cases, conducting a risk assessment is recommended.
• Initiate social media/ influencer/ brand ambassador risk assessment and preparation
  A thorough review of existing and upcoming social media campaigns, influencer engagement, and brand ambassadors is highly recommended. Political positions taken by brand ambassadors, in particular, make up a large share of recent PR controversies related to the Hong Kong situation. It may also be advisable for companies to assess their standard contract templates with brand ambassadors to guard against engagement on sensitive political issues. Scenario and contingency planning is a necessity for companies with exposure from a brand ambassador/ influencer standpoint.
• Institute clear guidelines for social media teams and community managers
  When a sensitive issue breaks, it is important that those managing the brand’s social media channels have clear guidelines and protocols to deal with a potential onslaught of negative consumer sentiment. Clear guidelines promote better decision making and allow brands to react quickly when an issue or a crisis arises.
• Audit internal communications processes
  Some corporate communications have inadvertently offended key audiences with internal bulletins on sensitive topics related to the Hong Kong protests. It is advised to undergo a review of procedures to ensure all potentially sensitive internal communication is reviewed by a team mindful of local and regional sensitivities prior to being shared internally.
• Prepare for public affairs engagement
  In any crisis, maintaining open channels with stakeholders and staying abreast of policy changes is critical to reacting appropriately to an evolving situation. A communications partner with a deep understanding of the local public sector is an asset to any crisis preparedness plan.
• Make provisions for crisis communications support if the worst happens
  In unstable situations of this kind, it is vital that companies are able to immediately ‘turn on’ crisis communications capabilities. This means undertaking vital crisis planning, including preparing likely scenarios, ensuring that crisis protocols are in place, training corporate ambassadors to respond effectively, running crisis simulations.

For more information, please contact members of our APAC Regional Team based in Hong Kong SAR: George Godsal, Regional Managing Director: Reputation, Risk, and Crisis Team at George.Godsal@bcw-global.com and Adam Wyldeck, Senior Director: Reputation, Risk, and Crisis, at Adam.Wyldeck@bcw-global.com.

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