Fragility of stakeholder trust and reputation laid bare in unfolding RTÉ crisis
When RTÉ management stood in front of staff in November 2019, it was likely a very solemn occasion for everyone...
The death of legendary broadcaster Gay Byrne had been announced the previous week, resulting in a delay to the planned staff announcement. In a statement - the now former - RTÉ Director General, Dee Forbes confirmed the need for a series of swingeing cutbacks.
The RTÉ Guide was to be put up for sale; RTÉ’s Limerick studio would close; RTÉ’s digital radio stations (including RTÉ Pulse, RTÉjr Radio and RTÉ Radio 1 Extra) would cease, along with RTÉ Aertel.
Most critically for staff, RTÉ confirmed that the station would be seeking 200 job cuts in 2020 alone, across the staff roster of about 1,800, in addition to pay freezes, tiered pay reductions and a review of benefits and work practices.
"When organisations need to make difficult decisions like these there always needs to be a sense of unity and that everyone, from top to bottom, will share in the pain equally."
And accordingly, a centrepiece of the plan was the need to reduce the fees paid to RTÉ’s top contracted on-air presenters by 15%. Salaries for the 10 highest paid broadcasters added up to €3 million in 2016, so a €450,000 annual saving would go a long way helping RTÉ achieve its goal and crucially help to also make the plan more palatable to all affected staff.
Ms Forbes’ statement ended: “The challenges in front of us are real. But RTÉ does have a plan, which we are confident can address many of the challenges we face and bring Ireland’s national public broadcaster to stability.”
The statement concluded: “However, Government needs to act to ensure there is a future for public service media in Ireland.”
In other words: "We’ll be doing everything we can to ensure RTÉ’s survival, but the State (and therefore the taxpayer) needs to play its part." However, rather than paying its top earner what it ‘reported’ it paid on the public record, an unusual side-deal was put in place involving alleged ‘top-up payments’ and a barter accounts.
RTÉ finds itself in a very unique position in Irish life. Funded by the taxpayer, it is one of a very small number of organisations that can count every single adult in Ireland as a key stakeholder. So when things go wrong, the reputational impact is significantly magnified.
A breakdown of trust can happen for a myriad of reasons of course, but when a fundamental tenet that you’ve used to build that trust with stakeholders over many years, proves to be built on sand, the reputation fallout is doubly grave.
The foundations of a strong and sustainable reputation is absolute clarity about the reputation you wish to have, and ensuring this aligns with your stakeholders’ expectations. On the face of it RTÉ seems to have operated with somewhat of a duel personality, a commercial organisation focussed on maximising revenues, principally from advertising and sponsorship, and a separate personality linked to its public broadcasting mandate focused on delivering trusted news reporting and current affairs programming.
The current crisis has its origins in a commercial arrangement that did not align with what RTÉ pursues on the editorial side of the organisation.
The other issue it raises is whether RTÉ had a clear understanding of its priority stakeholders and their expectation of the organisation. Was it their advertisers, commercial partners, ‘star’ presenters, employees, shareholder (in the form of the Government), policy-makers, or the general public? Not all stakeholders rank the same in terms of their power or influence and this requires trade-offs, but for a state-owned company servicing its public interest mandate has to be at the top of the list.
"This is a fast-moving situation and there are many, many questions still to answer of course. However, what is clear is that the RTÉ board will be battling this crisis on multiple fronts both internally and externally."
Those that find themselves in the heart of a reputation storm can usually point to a moment or point of inflection where asking the right questions at the right time would have resulted in another, more appropriate, course of action. When it comes to avoiding or minimising reputation risk, the questions usually begin with a simple “Is this the right thing to do for the organisation and our key stakeholders?”
The key now, for the RTÉ Board is to establish as many of the facts as possible, as quickly as possible, and put in place the correct and appropriate processes to start the long journey to rebuilding trust.
Transparency and openness will be key, and the days ahead – including two high-profile appearances for representatives before two Oireachtas Committees - will be a delicate balance of when and how much to communicate. Stakeholders will be demanding answers but the reality is, RTÉ might be limited in what it can say, certainly in the short-term.
Once the dust settles on this crisis, which it will eventually do, the fundamental question to be answered by RTÉ and its Board is what reputation does it desire to have in the future, and what values does it want to aspire to as an organisation?
The pursuit of that reputation ambition will guide the new leadership of RTÉ in making better decisions in the future.
Cormac Bradley is Managing Partner of Reputation Inc in Ireland