Lawrence S. Spiegel is a partner in the government enforcement and white-collar crime group of Skadden, Arps, Slate, Meagher & Flom in New York and general counsel of the firm.
The news media has observed that an epidemic of corporate apologies is upon us. Apology Watch and other trackers now chronicle our society’s mea culpas almost daily. So have corporate apologies become so commonplace that they are entirely ineffective?
Those who ponder corporate intent most commonly think yes, based on the claim that frequency is a hallmark of insincerity. In other words, if everyone is apologizing, no one must mean it. As further support â€" and drawing on a theme popularized by Shakespeare in “Henry VI†â€" those doubting the effectiveness of corporate apologies blame the involvement of lawyers for this rash of “insincere†apologies. Many argue that a heartfelt apologist would eschew legal counsel in favor of a spontaneous expression of remorse and advocate a moratorium on these flawed corporate expressions of remorse.
The issue of whether lawyer-crafted corporate apologies have actually increased in number or simply been magnified by the news media to feed a populist maxim regarding malicious intent is irrelevant because neither the frequency of such apologies nor the involvement of legal counsel provides meaningful insight into an apology’s value. Ultimately, the effectiveness of a corporate apology will be assessed on a micro level, where the meaningful metric is whether it satisfies those aggrieved by the corporate action â€" or inaction, in some cases â€" at issue. The acceptance of an apology could provide significant dividends to a company by strengthening its brand, reinforcing important corporate cultural principles and providing momentum for a company to undertake meaningful remedial measures.
However, members of an allegedly afflicted group could range from those truly injured to those who are merely opportunistic. While this makes it difficult to satisfy everyone, the substance, tone and proposed remedial actions encompassed in a corporate apology â€" and whether the statement actually redresses the alleged harm â€" is critical to its effectiveness.
A few weeks ago, Dov Seidman issued a call to action by outlining five essential characteristics of an authentic apology that should be put into play. Within that context, I would reinforce:
- Be precise about to whom and for what you are apologizing. An apology is unsatisfying when it leaves its audience speculating about the true facts, nature and extent of the harm. Precision and accuracy in identifying what happened and who is affected are crucial. If necessary, a company should state that it is continuing to investigate to understand fully the situation and ensure appropriate remedial efforts are undertaken. The alternative of constantly changing explanations in the form of multiple statements can undermine the effectiveness of the apology and lead to the perception that the company is not in control of, nor does it take seriously, the issue at hand.
- Forgo the knee-jerk apology in favor of a meaningful one. Anticipating liability, a company must be mindful of how it describes its conduct and consequences so it does not become the apologist for unrelated ills and misfortunes. But careful balance is needed to avoid the perception of a disclaimer-laden apology. Take time to understand what you are apologizing for.
- Outline your organization’s next steps and reiterate core values. An effective apology will demonstrate action to reverse harm caused by the improper conduct. A failure to address remedial measures may leave the impression of a lack of meaningful consideration of the underlying conduct and its consequences.
- Be honest and direct in your tone. An apology that appears to be reflexive and lacking in substance, and which seeks to divert attention from the conduct at issue, will be robbed of its effectiveness. Instead, address forthrightly the stakeholders and their reasonable concerns.
During a time when our society is most skeptical of the corporate apology, let us take a turn back to the basics. It is simple: keep your clients’ and shareholders’ best interests at heart and provide real information and solutions. With the above considerations in mind, we can restore the faith and good will engendered in a sincere and purposeful apology.
