A lack of transparency muddied one entrepreneur’s reputation

By Margot BOC

[This is the tenth article in a series of guest posts on professional ethics by graduate students in the Master of Arts (Communication) and the Master of Public Relations degree programs at Mount Saint Vincent University as a part of my Ethics & Law course, a required part of  their graduate programs.]

Transparency is held up as the gold standard when it comes to ethical communications, building trust and relationships. This means that people or organizations allow the public access to information about their activities and decisions. When they refuse to release information, it looks as if they have something to hide, a situation that can damage their reputation. There are times when it is appropriate to withhold information, but from a reputational perspective, withholding information (appropriate or not) can erode trust.

In September 2013, Jonathan Brett, an entrepreneur from Newfoundland and Labrador organized a social fitness challenge called Mud Immortal. He was very active in social media promoting the event. More than 5,000 people registered, a participation rate that exceeded Brett’s expectations. When Brett marketed the fitness challenge he said there would be food, water, entertainment, transportation and prizes. He also indicated that a portion of the registration fee would go to the Alzheimer Society. Participants said he failed to deliver and took to traditional media and social media to call for restitution. Brett retreated from the media issuing only a short statement about 36 hours after participants started complaining. Brett’s subsequent responses were limited as was his media availability. Prior to the event he constantly used traditional and social media including Twitter, but he stopped using the Mud Immortal Twitter account a day after the participants started complaining.

People need information to make informed decisions and to understand how the decisions of an organization will affect them. Ethically speaking, a person or an organization has a responsibility to share information with those who have a need to know, such as customers and shareholders. There are varying legal requirements for disclosure depending upon whether the organization is publicly funded, listed on a stock exchange or privately held.  The ethical requirements are less clear.

Brett operated a private company and as such he was not obliged to report how much money he made on the event, nor was he obliged to announce how much he would donate. He did have a moral obligation to explain why he did not deliver as promised, and to find a way to make it right for participants.

The media coverage often referenced his planned donation to the Alzheimer Society,  pointing out that the amount was unknown. Brett called it “substantial.” Had he quickly donated a “substantial” amount to charity, or been transparent about how much he was donating, it might have improved the situation. His failure to placate the unhappy participants resulted in significant and prolonged negative news coverage. Almost two weeks after the event, the Alzheimer Society announced it would not accept the donation because it did not want to be seen as endorsing the event.

Jack Balkin has identified accountability as one type of transparency.[i] When Brett did respond to the Telegram, he blamed most of the problems with the event on others including blaming moose for damaging the infrastructure and a security team for not showing up. Participants remained dissatisfied. Seeing the frustration of participants, lawyer Bob Buckingham used Facebook to discuss a class action lawsuit. Participants also pushed for a police investigation and almost five weeks after the event the RCMP confirmed they were investigating whether there were grounds for criminal charges.

We might conclude that failing to properly organize the event was the first problem, but failing to respond to criticism through transparency and accountability was probably more damaging to Brett’s reputation.

From a PR perspective, his lack of transparency damaged his relationship with participants and the media. It is impossible to know for sure if greater transparency, including media availability and taking responsibility for not meeting expectations would have satisfied the participants, but it is clear that his approach did not. Regardless of whether charges are laid or a lawsuit is filed, his reputation has been muddied.