By Glenn Schloss
Regional Director for Corporate Communications,
Hill & Knowlton Asia Pacific

It’s the moment every executive dreads. The police turn up for a raid, a legal writ arrives or the company finds itself ensnared in an official investigation.

This is a scenario companies increasingly need to deal with in the Asia-Pacific: the tide of litigation is rising across the region and at the same time governments are becoming increasingly aggressive in pursuing corporations in courts, tribunals and official inquiries.

The threat is immediate. Intense media scrutiny as well as the flood of digital news and views rom the Internet result in consumers as well as stakeholders making judgments about companies accused of wrongdoing within a matter of minutes, not waiting until the courts decide months or years later.

When a company is caught unaware by a legal or government action in the Asia -Pacific, the usual reflex is to call in the lawyers, hunker down and say nothing publicly for fear of worsening the situation or drawing further attention.

Meanwhile, police or officials publicise their own version of the “truth”, a trial by media is conducted while customers, suppliers, employees and partners wonder what is going on. In the absence of information, they also form their own judgments.

It is also a challenging time for communications advisers who will face some of the greatest tests of their skills: what to say at a time when the company is vulnerable. They also need to persuade management of the need to communicate when it is relying primarily on legal advisers - and the usual instincts of both is to say nothing except in court.

How the company responds publicly will set the tone for how it is judged not so much in the court of law but certainly in the increasingly powerful court of public opinion. Communication is crucial to minimising reputation and brand damage.

The evidence is compelling: saying nothing is the worst thing a company can do but an explanation will keep minds open. For example, 40% of people surveyed by Hill & Knowlton (H&K) believe a large company accused of wrongdoing in a lawsuit is probably guilty; 45% believe if a company is the subject of a government investigation it is probably guilty of some wrongdoing; 51% are less likely to buy a company’s products/services if it is accused of wrongdoing and 65% believe a company answering “no comment” is probably engaging in a cover up.

In the final analysis, though, communication does make a difference – 81% of people will keep an open mind about a company’s innocence or guilt until the conclusion of a legal/government action if it provides a clear, timely and detailed explanation, according to a H&K survey conducted in the US in 2002.

But this is not the way businesses in Asia have tended to respond due to conservative business, cultural and legal practices.

The political landscape of Asia including Hong Kong is changing dramatically which requires a shift to transparent, open but controlled communications. Media, NGOs and consumers now pay more attention to wrongdoing. Scrutiny is heightening and conducted in the traditional media as well as the digital world where forums, bloggers and Websites are proliferating. At the same time, Asian societies generally are becoming more open and pluralistic – increasingly similar in some respects to the US and the West.

The value of communications and public relations for companies involved in legal and government actions is not limited to those defending themselves. These are increasingly being adopted as tools to support litigation actions by plaintiffs or appeals against government decisions.

As well, companies need to be mindful that governments are increasingly establishing investigatory and ‘corruption fighting’ bodies and equipping them with wide powers to consider all sorts of hearsay evidence courts might not find admissible. The risk to reputations for companies even on the periphery of such investigations is immense. Campaigning politicians and journalists, not surprisingly, find these tribunals rich with sensational information classed as ‘evidence’.

The approaches and actions which communications advisers should consider for their best defence outside a tribunal or courtroom in a legal or regulatory situation should include:

Jacquelynne Wilcox, Public Affairs director for H&K Australasia, also contributed to this piece.