The collapse of US investment bank Lehman Brothers sent shock waves throughout the financial services industry, as it became the highest-profile victim of the credit crunch so far. But was the company also another casualty of poor PR?
The financial sector has been traditionally more insular and less inclined to engage with the public, which it saw as below them, incapable of understanding the complexities of the money market.
Financial institutions preferred their in-house PR teams to concentrate on keeping them out of the public gaze and calling on them whenever they were in need of a boost of positive PR.
And this arrogance left the industry detached from the real world, feeling it was immune to failure and that it did not need to be accountable to the public.
So when trouble appeared on the horizon, instead of choosing to address the public with the issues they were facing, industry chiefs continued to duck and dive.
This broke the trust of a public, who were concerned about their investments and pensions, triggering even more investor panic and rocking consumer confidence.
Lehman Brothers should have learnt from the demise of Northern Rock. The company was still financially sound, but the lack of clear information caused a run on the bank by panicking investors.
Had Lehman instead sought to open up more to its stakeholders, who knows what salutary lessons the bank might have learnt.
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