How Materiality Impacts Reputation

Corporate scandals: how Boeing, Volkswagen and Nissan could have seen it coming

Several global companies have been shocked by scandals and crises in recent years. 

Two Boeing 737 MAX 8s crashed in less than five months, killing 346 people. Volkswagen was found to have been cheating emissions testing over a period of years. Former Nissan Motor Co chairman Carlos Ghosn and former representative director Greg Kelly were arrested for allegedly declaring only half of the ¥10 billion of compensation Ghosn received from 2010 to 2015.

These crises raise questions about why various governance, environmental and safety risks hadn’t been foreseen.

Our analysis shows that all three companies had failed to report material information in the years leading up to the scandals – Boeing on product and service safety, Nissan on governance and Volkswagen on emissions.

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How materiality impacts reputation | whitepaper
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“Our study has revealed that when it comes to materiality analysis, no news is definitely not good news.”

Donato Calace, Director of Accounts and Innovation, Datamaran

Materiality analysis can prevent crises that ruin reputations and slash stock prices

The report examines each company’s reporting to assess whether they disclose sufficient information on their governance and practices on the issues related to these crises. It explains how a lack of transparency is an indicator of a potential forthcoming scandal. As a result, greater disclosure on a company’s governance and practices on material issues can help to avoid these crises.

A robust, data-driven, timely and regular materiality process can highlight all relevant material topics and reveal red flags before a scandal happens.
But the advice in this eBook will increase your long term value to your client and enable you to serve more clients in the same amount of time.

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