Ray Kelvin, the Chief Executive behind the UK fashion chain Ted Baker, has taken a ‘voluntary leave of absence’ as over 100 harassment allegations against him have come to light. Over 2,500 employees have signed a petition alleging that the firm has a ‘culture that leaves harassment unchallenged.’
The company has now called in heavyweight City law firm Herbert Smith Freehills to conduct an independent review into Mr Kelvin that will be presented to a committee of non-executive directors early in the new year. Ted Baker has said that until the investigation has been undertaken, the company cannot comment on specific allegations.
What can we learn from these latest allegations and how they been handled from a PR perspective? Firstly, corporate cultures are formed over time but need to adapt and change with the corresponding changes taking place in wider society. Behaviours that were tolerated in society and in the workplace just a few years ago, won’t be tolerated any more. An obvious point but the Ted Baker revelations depict a powerful Chief Executive who has seemingly been allowed to run a public company within a culture and behaviours of his own making. Indeed, when staff took their complaints about Mr Kelvin’s over-familiarity to the company’s HR, they were shrugged off with ‘that’s just Ray.’ And when the mighty fall, so too does the reputation of the empires they have built.
This brings me on to the role of the Chairman, Board, and non executive directors in managing corporate culture and corporate reputation. The Board of Ted Baker has taken swift action in instigating an independent review since these allegations came to light. However, I’d be surprised if they didn’t know about the kind of culture and behaviours that existed within the company. Often, when you have a powerful entrepreneur running a company that they have built, it can be difficult for the Board to exert its will. Point taken, good corporate governance relies on a strong Board that is prepared to challenge and change historic behaviours and the kind of culture that forms around those behaviours. This is where the Board and its non-execs can act as arbiters of good corporate reputation.
Finally, how do companies handle communication around historic issues that could adversely impact their reputation, particularly in light of the #Metoo movement? It’s important to note that the headlines surrounding Ray Kelvin are allegations at this stage and subject to an independent investigation. The company is right not to comment on specific allegations until the investigation is concluded. However, this doesn’t stop Ted Baker or other companies from taking positive action on how they will treat historic allegations of harassment and behaviours in the wider context of reviewing their corporate cultures. Take Deloitte as a shining example of this. Just this week its Chief Executive confirmed that the accounting giant has fired about 20 UK partners over the past four years for inappropriate behaviour including bullying and sexual harassment and that the company would adopt a zero tolerance approach to such behaviour in the future.
The Deloitte example shows how PR can be used as an offensive, rather than defensive, strategy in companies accepting that mistakes have been made in the past and that lessons will be learnt moving forward. Only then can new, more positive behaviours and cultures emerge. And timely and honest communication lies at the heart of this.
Ray Kelvin has built a hugely successful fashion brand and Ted Baker has become a personality as well as a marketing tool. The company proclaims that’s its success has depended on always asking the question: “Would Ted do it that way?” As the company now ponders how to emerge from this crisis, the answer is “probably not.”
Gus Sellitto is Managing Director of Byfield Consultancy and a legal PR specialist.