Businesses benefit

Businesses should not be prevented from doing the right thing

In Canada, the apology act is sufficiently clear and well established to enable the CEO of Maple Leaf Food to say that the two sets of advisors he didn’t listen to were the lawyers and the accountants.

As a result, when listeria bacteria got into its product and killed 11 customers, Maple Leaf Food was able to move swiftly.  It accepted responsibility, apologised unreservedly and set out to become a global leader in food safety.  How it handled the crisis is largely credited with the survival of the business.

A class action by victims, that had originally set out aiming for $100 million compensation settled for much less.  The class was so impressed by how well Maple Leaf had managed the incident.

Instead of being able to act with this integrity, businesses in the UK are forced to consider the legal implications of trying to do the right thing.

These may threaten their business, bringing their responsibility to shareholders into play.  Or they might be at personal risk of prosecution.

Not a lot of people registered that Manny Fontenla-Novoa, Thomas Cook’s former CEO, was under police caution during the reputationaly disastrous coroner’s hearing.  Who knows how different the explanation may have been had he been free to say what he really thought instead of fearing that he would be singled out for prosecution.

In addition to these legal implications, businesses may have to consider whether doing the right thing and apologising could have insurance implications, whether pay outs now or for the impact on their premiums later.

And all of this will have a huge impact on investor confidence, which too often is at odds with and trumps the court of popular opinion.

Better use of and clarity around the apology clause will resolve these conflicts.