Disinformation as a Business Risk

What companies have to gain by improved information resilience.
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Disinformation as a Business Risk

What companies have to gain by improved information resilience.

Disinformation is the deliberate spread of false or misleading information to deceive or manipulate individuals, groups, or the public at large. It is often used to advance specific agendas, instil confusion, undermine trust in institutions, or foster disagreement within society. Disinformation can take various forms, such as false rumours, fabricated news stories, misleading images or videos, and deceptive social media posts. The consequences for society are harmful, including the decline of critical thinking, the polarisation of opinions, and the amplification of distrust in reliable sources of information. Disinformation is a typical hybrid warfare tactic used by state actors. Still, it is increasingly used as a way to pressure or harm companies, organisations or individuals for a variety of motives.

Connected trends: Fake News, Hybrid Warfare, Information Warfare

When disinformation target companies

Companies can be targeted with disinformation in two different scenarios. Most common is that (1) companies become “collateral damage” when a foreign actor launches an information warfare operation targeting the company’s home market. It is also possible for any actor to (2) buy a disinformation campaign “off the shelf” and launch it towards the company as an active sabotage attempt.

The business impact of disinformation

A company targeted with a disinformation campaign can face several significant business impacts. The severity varies depending on the scale and effectiveness of the campaign. Some of the critical effects include:

  1. Reputational damage — False or misleading information about a company can tarnish its reputation, losing trust among customers, partners, investors, and other stakeholders. Rebuilding a damaged reputation can be a challenging and time-consuming process.
  2. Financial losses — Disinformation campaigns may cause a decline in sales, reduced customer acquisition, and decreased investor confidence. Disseminating false negative information can also lead to a drop in stock prices, affecting the company's market capitalisation and valuation.
  3. Customer loyalty and retention — If customers believe the false information, they may hesitate to do business with the company, affecting customer loyalty and retention rates. This could lead to a decrease in customer lifetime value and hinder long-term growth.
  4. Legal and regulatory issues — If the disinformation campaign involves false claims or accusations, it could lead to legal challenges, defamation suits, or regulatory investigations, further impacting the company's finances and operations.
  5. Operational disruptions — Disinformation campaigns may increase customer questions, negative social media sentiment, and other public relations challenges. This could divert the company's resources from core business operations to crisis management efforts.
  6. Employee morale and productivity — Negative publicity from disinformation campaigns can affect employee morale and productivity. Employees may become concerned about their personal safety, job security and the company's future, impacting their job satisfaction and engagement.
  7. Damage to partnerships and collaborations — Disinformation campaigns can also strain relationships with business partners, suppliers, and other stakeholders. These entities may fear associating with a company that is the target of false information.
  8. Cybersecurity risks — Disinformation campaigns are often combined with broader cyberattacks to compromise a company's network and sensitive data. Responding to and mitigating these cybersecurity risks can be both costly and time-consuming.

Proactivity can turn the risk of disinformation into an advantage

Companies can shift the risk of disinformation into an advantage by taking control of the narrative, building trust with stakeholders, and demonstrating transparency and authenticity. Here's how proactivity can turn the risk of disinformation into an advantage:

  • Early Detection and Response: Being proactive allows a company to monitor online channels and media platforms regularly to detect and address instances of misinformation or disinformation related to your company and connected topics. By detecting examples of disinformation early, you can respond promptly and address false information before it spreads widely. AI-powered tools can be used to identify and flag potential instances of disinformation. This rapid response can limit the potential damage to the company's reputation.
  • Transparency and Authenticity: Ensure your company maintains active official channels and platforms as primary sources of company-related information. Proactively share timely, accurate and reliable information with stakeholders clearly and transparently. Ensure these official channels are communicated to employees, customers, and stakeholders to avoid confusion and reliance on unreliable sources.
  • Fostering Credibility and Authority: A proactive approach to countering disinformation can position the company as a credible and authoritative source of information. Proactively engaging with stakeholders, including customers, employees, investors, and the media, shows a commitment to open communication and will help you clarify any misinformation in real time.
  • Build a Resilient Brand: Companies that proactively address disinformation risks demonstrate their commitment to protecting their brand and stakeholders' interests. Establish clear guidelines to safeguard your brand. Ensure your marketing and communication teams, company representatives, and employees understand the risk of disinformation and what can be done to reduce it. This proactive stance can make the brand appear resilient and capable of handling challenges effectively, enhancing your reputation.
  • Turning Crisis into Opportunity: By proactively managing disinformation risks, a company can transform a potential crisis into an opportunity for positive engagement and reputation enhancement. Strategically addressing challenges head-on can demonstrate resilience and a commitment to transparency, ultimately earning goodwill from stakeholders. Create a crisis communication plan that includes strategies for responding to misinformation campaigns. Assign roles and responsibilities to specific team members to manage crisis communications effectively.

By adopting these precautionary measures, companies can better safeguard their reputation, maintain trust with stakeholders, and mitigate the impact of disinformation on their brand and operations.

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