The Morning Risk Report: Companies Face China’s Wrath About Taiwan
June 6, 2018
By: Ben DiPietro
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Passengers at Taoyuan International Airport in Taiwan on May 29, 2018. China is putting pressure on airlines to change their Taiwan destinations to show the country is part of China. DAVID CHANG/EPA-EFE/REX/SHUTTERSTOCKEFE/REX/SHUTTERSTOCK
Good morning. China continues to pressure companies to acknowledge its control over Taiwan, Hong Kong and Tibet, putting businesses in the awkward position of trying to appease China while maintaining relationships in those locales, WSJ Risk & Compliance Journal reports.
Costco Wholesale is the latest company to have to deal with this issue, after the retailer recently was called out on Chinese social media for a 2016 letter from a Costco executive that stated the company “very much consider it [Taiwan] a country.”
Beijing claims Taiwan as Chinese territory but the island split from the mainland in a civil war nearly seven decades ago. Control of Hong Kong reverted back to China in 1997, after an agreement allowing the U.K. to run the island expired.
How should companies handle this?
There is “no magical messaging or purple pill that will make everyone happy,” especially with a contentious issue where political divides are unavoidable, said Jolie Balido, chief executive of public-relations firm Roar Media.
Companies can best thread this needle with a robust and integrated risk and crisis management program, having a cross-functional team in place, and getting clear direction from the CEO and board about what company policy should be, said Andrea Bonime-Blanc, chief executive of GEC Risk Advisory.
The only safe approach is to combine speed of response with a big dose of humility because, at the end of the day, it is about cultural respect, said Hugh Braithwaite, chief executive of Braithwaite Communications. “It’s the speed of their response and humble tone that helps the most,” he said.
EXCLUSIVE ON RISK AND COMPLIANCE JOURNAL
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