Reputation discussions should happen more frequently in business

But this gives rise to several questions: how many other South African companies are aligned to the Guptas, and should they also “fire” their client? The financial implications are, presumably, huge, and I am confident that there are many boardroom discussion being held this week on this very topic. There are companies who are hoping the noise will quieten down and that no one will notice that they do work for the Guptas, and then there are some who couldn’t care about the association and will continue with business as usual.

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Brand reputation is something that no board or leadership team should take lightly. It impacts not only which clients want you as their service or product provider, but a strong brand also acts as a powerful magnet to potential employees, and it is one of the things that makes current employees stay. I am sure that the staff at KPMG are quite pleased that management decided to sever ties with the Guptas.

In terms of reputation management, resigning from the Gupta family business accounts is the right thing to do. Yet I can’t help feeling that it’s all a bit opportunistic. Would these companies have fired this particular client if there had been no public outcry? And while they might be lauded for taking a stand now, did they really do their homework before they accepted the work? Should they have accepted work from Oakbay and other Gupta companies in the first place?

A company’s values are also a key attraction when looking for new staff. Employees connect with a company’s values – they get us out of bed every morning. If there is a misalignment, we will lose key people. Most companies proudly display their values statements in public areas and make a big thing of their values among their staff. But are their values aligned to their business practices?

I also wonder about past scandals which have rocked companies. How many companies cut their business ties with Shaik-owned companies when Zuma and his relationship with Shabir Shaik were under the spotlight all those years ago? And then what about those companies engaged in practices, either at home or abroad, that violate human or animal rights, for example? Do the management teams of service and product providers actively investigate the business practices of their clients and potential clients, and, if they find something dodgy, do they decline to take that client on? Or do they fire the current client when something that goes against their own company values and which, if publicised could affect their own brand reputation? Or do they just cross fingers and hope no one will make an association?

Yes, business is in business for profit. But it takes years for a company to recover from a reputation crisis and the financial costs can be considerable – think of PR costs, the cost of losing good people and having to hire and retrain new people, as well as the cost of losing clients who decide they don’t want to be associated to your company because of the company you keep. Not to mention simply doing the right thing, morally and ethically.

It is time for businesses to put their money where their mouth is and actively work towards living their values, not just paying lip service. Don’t be afraid to have those boardroom conversations around the type of clients you want associated with your brand – and be brave and say no if you believe they are not the company you want to keep.