Over the past few years, people and businesses have experienced new challenges and pressures as they navigate a global pandemic, social justice crises, political divisions and economic instability. Traditionally, financial institutions have chosen to avoid engaging in these issues and any risk associated with communicating a position.
Today, a heads-down approach is no longer viable for any business — especially one that plays an important community role such as banks or credit unions.
So, when should a bank speak up or stay silent? The answer lies in understanding the bank's stakeholders, activating its purpose, mission and values, and determining the organization's ability to be authentic.
The 2022 Edelman Trust Barometer showed that although trust overall is at an all-time low, business is the most trusted institution, especially among employees. That same study found people want businesses to step up on societal issues. How businesses take a position is a key consideration for both employment and purchase decisions. Specifically, 80% of the general population want CEOs to be personally visible when discussing public policy or work their company has done to benefit society while 60% of employees want their CEO to speak out on controversial issues they care about.
People expect more from businesses than ever before. Not only do stakeholders want businesses, including banks, to take a stand, but they also trust companies to make a positive impact.
The first step to building an effective social issue response plan is understanding the issues that most immediately impact key stakeholders — internally and externally. How will they feel if the bank speaks out? How will they feel if the bank remains silent? The issues that have the highest potential to affect employees, customers and communities are the ones most in need of addressing.
An organization's purpose, mission and values create a framework to guide a bank. They also provide a foundation for when and how to respond to a significant social issue. If the issue intersects with a bank's values or a previously stated commitment, there is a need to communicate the firm's position.
Staying aligned with the bank's mission and values is especially important during high-stakes situations and times of uncertainty. This is when businesses and their leaders will be under the most scrutiny.
The banking industry is in a unique position to make an impact through how they manage lending and invest in positive change. Brands should go beyond situational response plans to establish a clear and actionable social impact strategy. Those that do will have a significant opportunity to differentiate themselves and create meaningful connections.
Social issues can be difficult and emotional, and feel personal, which is why the banking industry largely has opted to stay out of the conversation until now. When choosing to engage and communicate, organizations must do so in an authentic, transparent and credible way.
Stay focused on social issues that are relevant to or have a direct affect on the banking industry. Ensure practices, policies and employee and customer experience also support a position.
Always pair words with actions. Stand-alone statements may be seen as superficial, creating a bigger reputational risk than staying silent. Actions don't have to be big to be impactful. They can be as straightforward as joining forces with or amplifying the voice of industry associations, community groups or business coalitions.
When deciding whether it is appropriate and authentic for a bank to speak up on a critical issue, ask the following questions: Does it intersect with the bank's purpose, mission, values, social commitment or brand position? Does it significantly matter to stakeholders? Does the bank have credibility to speak on this issue? Can the bank meaningfully influence this issue? Is there a risk to the organization by staying silent?
If the answer is "yes" to one to two questions, communication is likely needed following further assessment. If the answer is "yes" to three or more questions, proactive communication is recommended. Keep responses clear, concise and focused on summarizing the issue, based on verified facts. Acknowledge the emotion of the situation by sharing empathy, support or solidarity.
Share why this issue is important to the organization in the form of its purpose, mission, values or social commitment. And identify the actions the bank has taken or will take.
People hold financial institutions and their leaders to high standards. The days of keeping political and social issues out of the workplace are in the past. That said, organizations can't — and shouldn't — speak up on every issue.
Clear guidelines will help leaders make communication decisions that reinforce values, sustain trust and protect reputation.
