For the modern family office, trust is an asset. Truth is a driver of profits.
Reputational concerns can show up on both the managed balance sheets of affiliated businesses, and in the threats, risks and vulnerabilities to the public and counterparty trust of the family and its members.
Protect Your Reputation
To protect your reputation and the value of your brand, consider the virtues that your family seeks to advance and the vices that it seeks to avoid. Multiply interpretative variations of those virtues and vices by the handful to millions of people who seek to influence or control your family’s brand and reputation – whether for money, power, beliefs or no discernible motive at all. In today’s hyper-digital and invasive world, that’s what your family must effectively navigate and address now.
For the family’s operating businesses, the orderly amortization or impairment of reputational goodwill boils down to visceral questions: Do I believe in this brand? Do I want to buy from this organization? Work for it? Promote it to others? Do I want to target it for audit & regulatory scrutiny? investigation and prosecution? lawsuit? a contest for corporate control?
Both within and outside the often blurrily perceived walls between family members and their operating businesses, current public culture finds wealthy people as interesting to build up and/or tear down as when Sun Tzu wrote, “If you know thy enemy and know thyself, you need not fear the result of a hundred battles.”
Preempt Reputational Issues
While many established and emerging communications networks can distribute falsehoods and misdirection quicker than they can (or intend) to catch them, the options to preempt or counter reputational issues with truth and effective storytelling have also never been greater.
A solid foundation for this work is a cultural and systematic approach to truth telling. Working as an attorney, investigator and security consultant for the last 18 years I have seen situational ostriches, defensive explainers and over-sharers amongst the careful and competent who discover and communicate the truth clearly, compellingly and profitably. Ignorance is not bliss in the court of public opinion. Evidence can be valuable both inside and outside of a court of law. Public and private shareholders alike put a value on ethical leadership.
How truth and evidence are discovered, compartmentalized and distributed within the trusted environment of a family office can be as diverse as their structures and members. In all cases honest conversations with the family members, along with strategically tailored roles and responsibilities for the family office and its professional advisors, are the DNA of effective and profitable reputational intelligence. Whether for proactive reputation building or reactive crisis communication, success is the product of truth and planning.
Adam Safir is the CEO of Safir Intelligence and Security. He has assessed and mitigated security and integrity risks for high-net worth individuals, corporations and governments facing every day and extraordinary challenges throughout the world. An attorney and investment banker by training, Adam works closely with principals and their legal, financial and PR / IR advisors to carefully diagnose problems and deliver both urgent and sustainable solutions.
Related reading: Protecting the Privacy of High Net Worth Families