Whether in banking or technology, publicly listed companies are almost constantly entangled in civil, regulatory, and sometimes even criminal proceedings. When these cases play out in the media, the consequences often extend far beyond the legal realm. How can companies mitigate the risks? In his article for finews.first, Dominique Gerster, a former communications insider from UBS and Credit Suisse, provides some answers.
Raids, criminal complaints, enforcement actions, and disputes with competitors or clients are no longer just matters for legal departments. They quickly escalate to the executive level when legal proceedings generate significant media coverage and put corporate reputation at stake.
Executives should consider reputation management in legal disputes just as they would before announcing a new strategy, financial results, or leadership changes. Corporate communications play a critical role in shaping public perception.
Here are six key factors to keep in mind:
1. Public Statements: Speed Matters
Legal proceedings involving companies and their executives attract intense media attention, and for publicly traded firms, they can directly impact stock prices.
From a communications standpoint, the greater the potential reputational damage, the faster a company must respond. Moreover, regulatory announcements – whether from US, German, or Swiss authorities – are generally seen as highly credible, which can create a perception of corporate guilt before due process has even taken place.
2. Key Factor: The Legal Odds of Winning
When legal matters become public, companies must also be prepared to defend themselves in the media. Those who loudly proclaim victory from the outset risk greater scrutiny and reputational damage if they ultimately lose in court.
However, employees, customers, or investors may demand a strong public response. In such cases, a careful risk-reward assessment is crucial.
3. When a Company Files Suit: Not Without Preparation!
When regulators launch investigations or competitors file lawsuits, companies quickly rush to publicly assert their positions.
However, what is frequently underestimated is the risk of heightened exposure. Companies suing suppliers, smaller competitors, or private individuals often find public sentiment siding with the perceived «underdog.» These steps must be meticulously planned to ensure that the debate remains grounded in facts.
Particular caution is required when high-profile companies take legal action against media organizations.
4. A Track Record of Fines: A Reputational Liability
There is a significant difference between a company facing its first investigation and one that is repeatedly subject to legal scrutiny.
When a company becomes a frequent target, its credibility suffers if it consistently resorts to legal defenses without demonstrating meaningful change. In such situations, companies must focus on communicating concrete actions they have taken to address alleged shortcomings.
5. Legal & Communications Strategy Guide
Legal and communications teams must anticipate how a case will intersect with public perception. Key milestones – including the launch of an investigation, its conclusion, potential sanctions, public hearings, and court proceedings – must be meticulously prepared, with all possible scenarios in mind.
6. A Strategic Approach to Communication Channels
A well-executed communication strategy extends beyond press releases and social media statements. In addition to statements, internal leadership briefings, client communications, investor FAQs, and timely updates to regulators and political stakeholders are equally crucial.
Legal challenges are no longer just legal issues – they are corporate reputation risks. Those who manage them proactively and strategically will stand a far better chance of protecting their standing in the market.
Dominique Gerster is a partner at the consulting firm IRF. He advises national and international clients as well as high-profile individuals on strategic issues related to corporate and crisis communication. From 2005 to 2024, he held senior communication roles at UBS and Credit Suisse. He began his career as a freelance journalist (1998–2002) before working as a public relations consultant at the Zurich-based Wirz Group (2002–2005). He holds a master's degree in law from the Universities of Zurich and Siena (2002). He is currently pursuing an Executive MBA at the University of St. Gallen alongside his professional commitments.
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