12Apr

A brand’s reputation is its most valuable resource. This is especially true for non-profits. So when the news broke on Sunday that the International Committee of the Red Cross (ICRC) was inaccurately listed as a beneficiary of several shell companies set up by the Panama-based law firm Mossack Fonseca, the organization had to react immediately.

(C) KEYSTONE/Martial Trezzini

(C) KEYSTONE/Martial Trezzini

“We have never had a relationship with Mossack Fonseca and we have never received money from them,” said Peter Maurer, president of the International Committee of the Red Cross.

It turned out that Mossack Fonseca, the firm at the center of the Panama Papers scandal, set up two entities: Brotherhood Foundation and Faith Foundation, offering them to its clients as anonymous storage shells for their offshore assets. For further cover up, Mossack Fonseca listed the ICRC as the beneficiary of these two foundations.

Although these arrangements were made completely unbeknownst to the Red Cross, the records pose a very serious reputational threat to the international non-profit, as well as a real physical threat to its staff. The ICRC spokesperson Claire Kaplun expressed these concerns very well in her interview with the Associated Press:

“We work in conflict zones. We work without weapons. Our protection is our name, our emblem, the faith that people have in our reputation. Let’s say this money was linked to a warring party in a conflict. Imagine what consequences that could have.”

The latest fallout from the Panama Papers scandal serves as yet another example that, regardless of the industry or the ethics of your business practices, no brand is 100 percent safe from significant reputational threats and PR crises that can come from third parties.

Does your business actively monitor its reputation? Would you be prepared to immediately react to false allegations threatening to ruin your good name? Learn more about Red Banyan Group’s crisis and reputation management expertise at RedBanyan.com

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