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Taking a Cue from Merrill Lynch

By: Maya Lunnemann | 12/10/2008

I wonder if Merrill Lynch's CEO, John Thain, is still kicking himself. After all, he did take quite a beating after reports leaked that he would ask the company's directors for a $10 million bonus. After almost a full day of enduring ridicule from the media, Thain withdrew his statement and said that he would forgo his 2008 bonus as many CEOs have done recently. But his one move (which he may have genuinely regarded as justifiable) damaged his reputation with the general public.

It's a great lesson for anyone in corporate management and communications. The role of communications isn't just about getting out the message - it has shifted into managing and protecting a company's reputation (from C-level executives to frontline employees). Consider how the Merrill Lynch story may have unfolded if Thain had consulted with someone in the business of "reputation management." His trusted advisors may have suggested that his request would send the wrong message to his audiences - employees, investors and the general public. They may have talked about the timing of his request and provided counsel on how to approach the sensitive subject. I'll admit that how a CEO approaches a bonus is typically outside the realm of a communications department. But in an age of transparency and rapid communications, companies must consider the consequences of every action and how their audiences may respond.

If you were one of Thain's trusted advisors, how would you have responded?

Posted in Reputation Management