It would appear, that under the guidance of CEO Thomas Borgen, Danske Bank are slowly regaining their “license to operate”. Because of the severity of neglect of valuable stakeholders in the public sphere, Danske Bank almost did not make it through the crisis. Some even argue that had Danske Bank been any other type of company, it would not have survived. Based on the findings above it is clear that Danske Bank made a mistake in how they were justifying their positions. Danske Bank tried to explain that the establishment of the fee structure, for example, was to ensure more transparency.
The effect was that the actual attempts of creating more transparency in fee structures instead were interpreted as a failed attempt at masking the company’s real motivation, which the public deemed to be shareholder gains. As Christinsens states, the concept of symmetry and transparency are mutually dependent meaning that one cannot exist without the other, so if one party does not accept the premise then there is no transparency.
Admitting the motivation might have had a more positive effect and limited the massive criticism that emerged. As prior research has shown, there is a case for sharing information even if it entails admittance of guilt. In this case was there was lack of transparency in stead, which resulted in very little information being shared with the public, at the cost of public trust. The uncertainty, that was mainly the product of the financial crisis, birthed more and wider spanning crises that were very poorly managed. They mistakenly thought that their first accountability crisis was managed and that the public had been ready to accept the new social order. The ramifications of the lack of their ability to lower uncertainty resulted in a full-blown legitimacy crisis, which threatened the very existence of the bank.
The first major communicative mistake was made immediately after the financial crisis. While the government did try to mitigate some of the uncertainty caused by the financial industry, they themselves did very little to explain or apologize for their involvement. This “pride” for lack of a better word, was further demonstrated by the lack of interest in addressing the main issue during the time after the crisis – the allocation of fault. Executives should have been punished, bonuses should have been abolished and the smart bank executive would have taken a pay cut alongside their employees. They did not.
To extend, no efforts were made to inform the public, and this lack of transparency gave course to myth formation. The public needed and wanted an apology not marketing, and Danske Bank responded by trying to brand the company as a financial institution that understood the new social order that had emerged internationally.
Decoupling between words and action – New Double Standards
Major decoupling issues were also present, with huge discrepancies between actions and communication. During the lowest reputational years 2012 and 2013 customer focus was communicated but not acted upon. This sparked even more outrage, meaning that many competing orders of worth were employed making the successful establishment of a social order virtually impossible.
"Måske er kampagnen et forsøg på at snakke udenom. Det er i hvert fald et bud. Men husk: “Old mistakes demand good explanations.” Gamle fejltagelser kræver gode forklaringer - eller endnu bedre handling: Kom dog i gang!." (Nielsen L. , 2012)
“Perhaps the campaign is an attempt to beat about the bush. That is one explanation. But remember:
"Old mistakes demand good explanations." Old mistakes require good explanations - or even better, action: Get to work!” (Nielsen L. , 2012)
The exact motivation for the New Standards campaign one can only speculated about. The focus of Danske Bank in this period was clearly to on the one hand to conform to regulation and deliver to shareholders, but this happened at the expense of the most vulnerable groups in the Danish society.
The ramification have been that the entire campaign has been renamed “New Double Standards” by the public, showing that they did not accept the bank’s attempts to regain legitimacy after the accountability issues during the financial crisis. Put in the perspective of reputation, the penance had not been accepted and was virtually non-existent. Danske Bank thought that there was a possibility of skipping the penance phase, jumping straight to the reintegration, but the public showed that this was not the case.
Taking into account the aspirational view of CSR, communicating about customer focus might have finally yielded the customer focus, as it is seen in the 2015 report. Maybe the aspirational talk of customer focus in the end meant that initiatives towards real customer focus emerged. It can be discussed though, that the aspirational talk would not have resulted in customer re-orientation, had it not been for the public scrutiny at this time. Without the continuous pressure from the public organizational change might not have happened.
In their pursuit of strong and consistent communication, Danske Bank succeeded in alienating the public and opening the door to in-transparency. Positive stories about good CSR initiatives were met
by skepticism. On the other hand, looking at the findings in this thesis, it can also be argued that the public scrutiny in fact had the opposite effect of limiting the possibility of Danske Bank trying to live up to the ”New Standard” they proposed. Because they were called out on their inconsistencies, they were given the possibility to explain and this has paved the way for restructuring of the corporate marketing, shifting it away from mass media and focusing on fostering customer satisfaction and trust.
From mass marketing to customer focus
"Danske Banks image blev banket i bund efter fiaskokampagnen "New Standards". De seneste to år har banken holdt lav profil, skåret i marketingbudgettet og undgået de store, dyre tv-kampagner.
Banken har i stedet satset på at møde kunderne i øjenhøjde, men erkender, det er et langt, sejt træk at ændre folks opfattelse af brandet. Siden Danske Bank fik ørerne godt og grundigt i maskinen med den stærkt kritiserede New Standards-kampagne har banken holdt lav profil og haft snor i marketingkronerne." (de Vries, 2015)
“Danske Bank’s image was beaten to the ground after the failure of the campaign" "New Standards".
In the past two years the bank has kept a low profile, cut in the marketing budget and avoided the big, expensive TV campaigns. The bank has instead focused on meeting customers at eye level, but realizes it's a long haul to change people's perception of the brand. Since Danske Bank got their fingers burned with the much-criticized New Standards campaign, the bank has kept a low profile and kept a short leash on their marketing crowns.” (de Vries, 2015).
Because of multiple and different transgressions ranging from shareholder responsibility to customer neglect it seems that the best approach to dealing with these multiple constituencies is to address them in the CSR reports more than relying on any mass communication channel. It is impossible to find an external communication strategy that would successfully address all the issues that are portrayed in the data. Therefore it makes most sense to categorize actions and processes in a transparent and coherent report.
Danske Bank tried to compensate their lack of action and lack of interest by over-communication.
This resulted in the creation of a deep-seated mistrust between the public and the bank making their legitimacy efforts fail within most of the orders of wroth or themes found in this investigation. Slow and quiet change seems to be the right approach when dealing with crises of this scale. The public demanded accountability and initiatives to be undertaken, and was met with even more in-transparency and lack of accountability for the things that occurred during the crisis.
Thus, the combination of turning down on marketing campaigns and focusing on delivering customer service are in combination, slowly but surely reinstating Danske Bank as a legitimate actor. The one main issue that they still have is the lack of physical locations, and that is not going to change in the near future. To re-establish some of the lost trust, they are going to need to focus on being even more accessible to clients, but this does not fit with the strategy of cutting down on costs and is very
Legitimacy test
Stakeholder reactions
Mobilization of discourses
Perceived accountability
Legitimacy repair
Concrete engagement Moral repositioning
of grand order discourse Disruption
+
+
-- Legitimacy loss
Positive public perception Decoupling Institutional redefinition
unlikely to happen. Since this is not an option, the only right approach is to continue working on Accessibility. Danske Bank did not acknowledge the stakeholder group that had the most urgency of claim during the legitimacy crisis. Massive investments in digitalization has increased Danske Bank’s image among young customers, demonstrated among other things by the massive over-representation of positive and neutral themes that have emerged.
In the case of Danske Bank, it seems inevitable to construe that stakeholder engagement combined with lowering external communication budgets have contributed massively to reintegrating Danske Bank as a legitimate actor. The data also shows, that transparency and accountability are mutually dependent and are a prerequisite for regaining legitimacy, which in this thesis is defined as “public accountability”, but does not refer to the theme public accountability. The unique contribution of this thesis has been to look at how CSR reports can be used as a tool to pave the way for reintegrating an illegitimate actor into society. Working with multiple perspectives at once has opened the pathway to a new framework encompassing the different stages that are at play when an organization is trying to reintegrate into society through legitimizing communication and activities.
Further research
The findings in this thesis have given rise to many avenues for further research. The first and obvious avenue would be to take the data assembled in this thesis, and test the proposition posited that the concept of “perceived accountability” has a mediating effect on legitimacy repair. Another approach could be to look into the effect that social media has had on rebuilding trust between Danske Bank and the public. Danske Bank’s Facebook page is widely used and seemingly well managed.
Aligning the findings from this thesis with corporate financial performance could also give an indication as to which factors of CSR policy can affect customer satisfaction and thus financial performance. This could help to close some of the gaps and propose a path to finding a way to
Figure 13 - Proposed reintegration framework
measure tangible assets of CSR reporting, which is in great demand from businesses, and can be used to institutionalize CSR even more.
Further establishing motivational effects of CSR involvement could also be a fruitful avenue for further research. Qualitative research of the quality of the content versus actual information within reports could also be developed further, as it has emerged in the work with the data, that more pages does not necessarily mean that more CSR initiatives have been undertaken by the company reporting.
This could help to further develop a framework for what constitutes a good CSR report. Statistical analysis through gathering more data across multiple banks, and holding the data up against public perception, might yield enough quantitative pieces of information so a proper statistical study could be performed, to figure out whether causality could be proved.
An interesting avenue for further research might also be to compare how CSR initiatives and their perception differ across the markets in which Danske Bank is active. It would be interesting to look into whether there is a difference across borders, but within the same company. This is also where the internal and external legitimacy perceptions might come into light. Obviously, cultural differences may be found across different markets, and it could be interesting to look into how this proposed framework works across different cultures and industries.
As Christensen & Langer theorize, absolute consistency between corporate action and corporate communication can in fact inhibit organizational change (Christensen & Langer, 2009). But this raises the question of what exactly pushes this change. The data presented in this thesis seems to indicate that it is the external pressure from the public that brings about positive changes in company behavior.
The last proposition could be to look further into the drivers of change in the financial industry.
Conclusions
Positivists may argue that without a proper statistical analysis and regressions it is not possible to show the relationship between two independently occurring communicational efforts. It is true that a direct, clear and definite 1 to 1 relationship between the public perception and CSR reporting practices cannot be proved statistically, it is worth noting that these practices, in fact, also work to describe the corporate mentality.
If the claims of focus on action in stead of words is truthful in the report, and it is perceived as such by the public, then three conclusion can be made:
1) That CSR report and the ambitions, practices and communication of them are genuine, effective and embedded in the core practices of the company, 2) That there is a connection between CSR aspiration and eventual CSR action, and 3) That at least in the Danish context, a company that is in the process of reintegrating its practices as a legitimate actor needs to focus on reducing external mass communication.
CSR reporting, as is shown in this thesis, can be a valuable tool in the company’s arsenal. Although it brings about slow change in pubic perception, one can argue that anything that is good is worth the wait. The main problem with Danske Bank’s failed attempts at defining the “New Standards” has been to disregard the public perception of them at the time, and selectively marginalizing some stakeholders.
Effective communication is supposed to be about changing perception. When it comes to accountability, sincerity is the right approach. Although the correlation is not statistically strong there are indications, at least in Danske Bank’s case, that CSR reports have been used as a tool to address stakeholder concerns and engage the public. Whether the public has read them was beyond the scope of this thesis, but it is safe to assume that there has been an attitude shift, which is clear from the reports. The attitude shift is prevalent both in the public and Danske Bank. Danske Bank has shifted rhetoric from being mainly defensive to actually trying to address the urgency of claims of the stakeholders. This leads the thoughts back to long- and short-term orientation and the indications that actual CSR efforts have more value than branding CSR efforts.
Although genuine transparency initiatives were taken into action, the public did not accept the justification behind the reasons, which seems to indicate that if transparency is not followed by accountability it is not perceived as transparency. This posits that accountability and transparency are mutually dependent. This researcher proposes that accountability is the result of transparency and public scrutiny, and transparency the result of accountability.
Another small but interesting conclusion is that there seems to be no correlation between the amounts spent on charitable donations and the public perception. The charitable donations go from 27 million DKK in 2007 to only 1,2 million DKK in 2015. On the other hand, volunteer hours go from 5.200 in 2008 to 15.920 in 2015. It seems that there is a case for moving attention away from charitable donations to volunteer work instead, which is in keeping with the fact that, in Denmark, there is a strong welfare state and the needs for donations are not as prevailing, as they would be in a different cultural context. Furthermore, physical contact is always more favorably evaluated than e.g. simply giving money to support a local football team.
It is important to consider the massive role that media has in shaping public opinion. It is crucial for companies to keep a finger on the pulse of public perception to ensure that their CSR actions can work proactively and not reactively. Working closely with mobilizations of discourse might mean that the companies can in fact shape public discourse before the attention turns to them, thus being a first mover and anticipating the problems rather than reacting to them.
A small, but interesting and unintended conclusion that can be made is also that the amount of pages of the CSR report, does not necessarily correlate to more or better quality content. A good report as stated before, is a report that succeeds in sharing information with relevant stakeholders. If the reports
and other public information disclosed by the companies does not facilitate a dialogue with the stakeholders then it is not serving its purpose. The whole point of disclosure is its ability to hold companies accountable, but if this process is not facilitated then it can lead to in-transparency. The 2012 and 2013 reports were both quite low with regards to CSR initiatives and promises, but they both consisted of 50% more pages than any of the previous or later reports. This conclusion also positively relates to the fact that CSR in the Danish context should not be used as a branding tool, unless real responsibility, accountability and transparency are achieved.
The data clearly shows how Danske Bank is responding to stakeholder claims and how the public perceives these responses. This is mostly clear in the report, which was published in 2013, where efforts have been made to address the issues of financial inclusion, which fall under the theme Customer favoritism. This issue does not arise until the last three reporting years, meaning that they can be viewed as a direct correlation between public scrutiny and subsequent reaction on behalf of Danske Bank.
When it comes to responding to a legitimacy crisis one particular quote gathered in from the data springs to mind:
“Der findes et godt engelsk udtryk »show it, don't tell it«, som er essensen af, hvordan et sønderskudt image genopbygges. At man ikke skal snakke så meget, men via sine handlinger overbevise sin omverden.” – Jens Chr. Hansen, Jouranlist (Hansen, 2013)
“There is a good English expression, “show it don’t tell it”, which is at the essence of how to rebuild a broken image. To not talk so much, but through one’s actions convince the outside world.” – Jens Chr. Hansen, Journalist (Hansen, 2013)
Based on the research conducted in this thesis, in the case of banks the old saying ”any publicty is good publicity” seems to be wrong. In the case of banks less publicity is more legitimacy.