An interview with Louise Stonier, Pets at Home -  How being ethically compliant can help businesses protect against reputational damage

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Businesses constantly face new commercial and legal challenges. There is an enormous advantage in being well-prepared. Louise Stonier, Legal Director and Company Secretary at Pets at Home Group Plc, talks to us about how policies and procedures and an ethically compliant culture can help businesses protect against one of the biggest risks – damage to reputation.

 

Tell us about your experience of threats to your business’ reputation …

Earlier this year, we discovered that the business was going to be covered negatively in the media. I knew that we had a really strong position and could defend ourselves in a much more effective way than we had done in similar incidents. We had dealt with previous threats in a particular way and had learnt a lot from those experiences. Those lessons definitely helped us to be better prepared for dealing with future risks. In this case, our good position was primarily due to all the rigorous policies and procedures we have in place.

In terms of lessons learnt from previous incidents, are there policies and procedures that you didn’t have in place then that you do now?

Once anything like this happens you have to sit down and look at why it happened, what were the areas that were brought up and what lessons can be taken from that. There are always things you can do better.

After one incident, we set up a separate committee to review what had happened and look at the measures that we needed to put in place. We also put it on the Internal Audit’s agenda as something to be scrutinised on an annual basis.

We report back to the Board on the Legal and Commercial policies and procedures and we’re constantly reviewing them. It is really important to keep it in everybody’s minds.

Looking back at previous experiences, what do you wish you’d done in order to be prepared for such situations?

The biggest lesson we’ve learnt is that when there’s a risk of reputational damage, it’s crucial to have some great lawyers onboard with lots of experience in the area. You need lawyers who don’t just look at the law but who can advise on the bigger picture, the commercial risks and really understand the implications for your business.

You need to get the right lawyers in place well in advance of an issue arising, particularly if reputational damage is your number one risk. My biggest piece of advice is to get somebody onboard who knows you already. Someone you’ve shared your policies and procedures with, who’s been taken round the business and has visited one of your stores.

The same applies if you use a PR agency. Ours know us very well so in that respect we are well-prepared. They know our policies and procedures. We have a big document of all the tricky questions that could ever be asked on reputation. This gets updated regularly and is ready to go if we or the PR agency need it.

When you hear that there is a risk to your reputation, what is the first thing you do?

We start by putting together a small team of those individuals involved in the defence: myself, the Commercial Director, the Logistics Director and our Head of Public Affairs. Three of the team are members of the Executive. It’s really important that you include key people who are focussed on the organisation and can make decisions.

We can have very little time to respond to accusations. As soon as we find out, we gather together all of our policies and procedures so that we can start responding to the allegations. We set up shared files on the system so that the team has access to everything. We immediately set up a policy on how things have to be named and which files they needed to go into. We upload into a central file everything we have that could defend our policies and procedures. There are so many people dealing with the documents that you must have some controls in place.

Using our central pool of policies, procedures and other relevant commercial information, we are able to systematically go through every allegation and draft a legal letter in response. To be able to respond quickly, the trick is to have all that information to hand and documented somewhere. For example, one allegation made was that we don’t train our colleagues to handle reptiles – we were able to pull out a document that lists all of our training procedures to defend against that.

What policies and procedures do you have in place for monitoring risk to reputation and making sure Legal hear about it?

Ensuring that concerns are escalated is a real challenge. Which people need to know if an issue arises is something you really have to educate the business on. We do have an escalation policy but we rely more on constantly educating people. Every business should know what their number one reputational risk is. Everybody in our business is very aware of what ours is, so any threat to our reputation can be escalated straightaway.

We don’t provide formal training on the escalation policy. The business is aware of what is expected of them in that they’re not allowed to talk about certain things and they know who is allowed to respond.

Do you consider yourselves to be an ethically compliant business?

Yes, very much. We want to share that with our customers. We want to share it with everybody. We don’t hide anything. It’s all there for everybody to look at. The importance of having an ethically compliant culture, particularly for a business like ours, is that it helps protect your reputation if it is called into question.

Damage to reputation is our number one risk. People know that because it’s also our number one value and part of the culture of the business. We have some really strong policies in place when it comes to the training of colleagues in stores. Colleagues become specialists in various areas and it means we’re giving out the right advice to our customers. We know this is the case thanks to the policies and procedures we have in stores and the standards we expect. We audit the stores and there are also independent audits carried out by a company under the auspices of the Pet Care Trust.

In what other ways is the ethical culture of the business evident?

When you’re looking at reputational damage you have to take a step back and think about the whole range of things you can do to protect your reputation. It’s not just about reacting to protect it when things go wrong – it’s also about being proactive and making sure you’re constantly working in different ways to build and maintain your reputation. For example, we do good work with charities and local communities and that has earned us a lot of respect.

We take corporate social responsibility very seriously and enjoy it. It’s a lovely side of the job and it’s really great to do. Last year we raised £3.1 million for our charity Support Adoption for Pets and the majority of that came through our stores. The colleagues really get behind it because it’s something that they can get involved in. They get to go and visit the charities and really see the difference that’s being made. Our customers also get involved through our various programmes.

Also, on the ethical side, we expect our suppliers to look after the pets the way we want our pets to be looked after and the way we also expect our customers to look after them. We’ve recently stopped buying any food with rabbit-flavoured variants in it because the charity Four Paws showed us the shocking conditions that rabbits bred for food are kept in. We also stopped selling rabbit muesli because we discovered that it causes rabbits to feed selectively. We wrote to all the other retailers to highlight this issue and asked them to follow us.

Our experience has shown that if your reputation is challenged, the ethical culture of the business and the effort you have made to be compliant by having the right policies in place form a very strong defence.

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