Crisis at Balenciaga
The crisis at Balenciaga could have been avoided with better corporate governance, including Board oversight.
According to a recent report in The Guardian, the luxury fashion house Balenciaga produced two advertising campaigns, one of which featured children holding teddy bears in bondage gear and another which revealed documentation from a US supreme court case considering whether child sexual abuse imagery legislation curtails freedom of speech rights. Although the brand has now apologised, admitted a “series of grievous errors” and launched a $25 million lawsuit against one of its suppliers, the damage has been done. The ads caused a considerable backlash on social media and prompted the Business of Fashion website to rescind the global award it was due to have presented to Balenciaga’s creative director, Demna.
Whatever the outcome of the litigation might be, it should have been obvious from the outset that choosing to juxtapose children with BDSM paraphernalia would be controversial at the very least and repugnant to most. Associating this with a campaign featuring two Hollywood A-listers – Nicole Kidman and Isabelle Huppert – in which child sexual abuse documentation was used as a prop, seems extraordinarily reckless.
This is the sort of damage that will have lasting reputational and financial damage: it is not surprising that other A-listers are “re-evaluating” their relationship with the brand. To its credit, Balenciaga has taken “full accountability” for its “lack of oversight” and is “closely revising [the] organisation and ways of working”.
To protect itself from this sort of incident happening again, I strongly recommend that Balenciaga improves its corporate governance. I have two suggestions to start with:
In future, run all advertising and marketing campaigns by the corporate affairs department for their perspective on how the external world might view that campaign, whether it might break any laws or regulations, and/or whether it might have an adverse reputational impact.
Also run any foreseeably controversial campaigns (such as this one) by the Board. The Board is ultimately responsible for a company’s reputation and any damage caused by a reputational crisis. Moreover, ensure that one of the Board directors has a background in corporate affairs and reputation management, so that if risks of this kind are not picked up at executive level, they will be picked up by the Board before it is too late to do anything about them.
Image credit: The Guardian