Did NKF handle its CEO's personal indiscretion news well?

Recently new broke that National Kidney Foundation (NKF) fired its CEO for “personal indiscretion” . The last time NKF came into the negative spotlight was in 2004, where then CEO, T T Durai was found to be misusing its finances for personal gain.

In a statement issued to the press, NKF confirmed the termination of CEO Edmund Kwok (pictured centre) with effect from 14 November 2016. According to Channel NewsAsia, board member Koh Poh Tiong, said during a media conference that Kwok was personally involved with a male staff member of the organisation.

The search for a new CEO will commence soon according to the statement. It added that operations are not affected by the matter, and services to patients and beneficiaries continue as per normal.

“The board of NKF would like to assure all stakeholders, including patients, donors, supporters and employees, that Mr Kwok's personal indiscretion has nothing to do with the stewardship of our finances,” the press statement read.

While it can be argued that ‘personal indiscretion’ should not be associated with work, does the tune change when it comes to a top executive like an CEO who is the face of the brand and organisation?

Curious to see if NKF handled the matter well from a crisis communications perspective, Marketing spoke to industry professionals to find out what they made of the matter.

Different standards are held to different industries

“Whilst some may argue that ‘personal indiscretion’ does not and should not affect work, the situation will differ for people in certain professions or industries. For example, lawyers or doctors having affairs with patients is strictly not allowed according to professional guidelines,” Cho Pei Lin, managing director of Asia PR Werkz, said.

Cho explained that in the case of NKF, it is not just a registered charity organisation but rather an “Institution of Public Character”.

Such organisations are held to a higher standard, both in terms of regulatory compliance as well as governance as it depends on donors and grant for revenue.

Hence it is inevitable that the confidence of the public will be shaken if it is made known that the CEO of the organisation is involved in alleged ‘personal indiscretion’ that could amount to criminal misconduct and that the alleged misconduct took place at the charity’s workplace, she added.

However, things would have been made worst if the organisation did not take immediate action to remove Kwok from a position of authority and responsibility.

“Not all brands need to respond similarly when faced with such a situation. A profit-driven company that is owned primarily by private shareholders, for example, may not even need to disclose ‘personal indiscretions’ of key employees,” Asia PR Werkz’s Cho explained.

NKF handled the situation well

Given NKF’s history, Cho said the board did well to take charge of the situation. Agreeing with her was Lars Voedisch, managing director of PRecious Communications, who added that the current incident is very different from the previous massive crisis involving Durai.

The previous incident placed the whole organisation at risk and showed that its governance structure did not work. This time however, it was about a single person’s personal misconduct.

“They called a media conference as soon as possible, was as transparent as they could about the facts of the case, took quick action to remove the CEO and was able to assure the public that the finances of the organisation was not compromised,” Asia PR Werkz's Cho explained.

Voedisch added that this showed the public that NKF had internal processes in their governance approach. This creates trust in the system as it shows that the organisation can deal with such issues independently of the seniority of the person.

“This assured the public, patients, staff and donors that the organisation itself is not in jeopardy and there is a process in place to ensure business continuity,” he explained.

How should brands respond in similar situations?

Voedisch is of the view that the use of the term “personal indiscretion” leaves room for speculation. However, as NKF filed a police report, the matter is now classified as an ongoing investigation. This leaves the persons affected - such as the male staff involved - with certain privacy rights to prevent exposure of his identity.

To salvage the brand’s image in the view of the public eye, Voedisch added that it is key to emphasise that this matter was the wrongdoing of a single person. Here are four things brands should know:

  1. The organisation is sorry for the incident,
  2. This does not represent the company’s values or what it stands for,
  3. The actual business and mission the organisation was set out to follow is not in question and wasn’t compromised,
  4. There are processes and systems in place to identify and deal with possible incidents.

(Picture: NKF's Facebook page)