The huge reputational damage to the Academy – as opposed to the protagonists, comedian Chris Rock (currently on a sell-out tour), and actor Will Smith (who has had a number of projects cancelled in its wake) – is perhaps the most far-reaching of the impacts.

And it serves as a timely reminder that if the internal culture is not right, it can create an environment not only for undesirable things to occur but for weak and slow responses

First, just in case you have been hiding under a (Chris-shaped) rock these past months, a reminder of the facts.

At the 94^th Academy Awards on 28 March, host Chris Rock told a joke about a health condition suffered by Jada Pinkett-Smith, which husband Will Smith did not take well. Approaching the stage, he slapped Rock before returning to his chair and continuing to throw expletive-ridden threats at Rock. Just half an hour later Smith was back on stage giving a tearful Oscar acceptance speech for his portrayal of tennis supremo Richard Williams, for which he received a standing ovation.

All the while, social media was in meltdown.

Obviously, the Academy cannot be held accountable for the impulsive actions of an angry A-list celeb, but as the dust settles, the issue of governance within the Academy membership has come into sharp focus and the wider implications of how it responded to an incendiary incident are worth examining from a corporate governance perspective.

Much of it has to do with culture, and there are five key lessons:

1. Group-think leads to poor decision-making: US awards have hooked into the idea of the host roasting the stars there to be celebrated. While much of the debate has been on Rock over-stepping the mark by moving from professional to personal remarks, is it culturally acceptable to launch public and direct attacks on A-listers in an age where mental well-being should be to the fore? The continuation of such an approach smacks of group-think and a stronger and more diverse board might have challenged this tired format, removing or at least anticipating the threat.
2. Protecting the business, not individuals: Under modern interpretation there is no doubt that The Oscars would be considered a work event and striking another individual an instantly dismissible act. While Smith’s ongoing projects have been impacted since, as an organisation it is crucial that governance and expected acceptable behaviour is consistent, because good governance and company culture are there to protect the entire business, not stars or highly-placed individuals. Lest we forget, the movie business is supported by everyone from caterers to technicians, distributors to extras.
3. Response planning: Smith remained in the auditorium because he refused to leave, according to the Academy, which does not sound very reassuring for the security of the rest of the stars in the building. A proper response plan would have enabled the ‘right action’, which was clearly to remove him. Hugely embarrassing as that would have been, latterly it would have been seen as an appropriate response. But those decisions are hugely difficult to make in the moment, they need to be prepared, agreed and embedded.
4. Moving quickly: While the Academy initially issued a weak and wishy-washy response, by the time it had banned Smith for 10 years, he had jumped already. Clear corporate governance guidelines and a well understood reputational management plan would have seen the governors act rapidly, get their message out first and take control of the situation – however unexpected.
5. Governance to protect business reputation: Wrongly, the role of the Company Secretary and the value of corporate governance is often seen as a protective and responsive. In fact, putting in place a code of conduct for board directors and robust measures to deal with non-compliance will ensure a proactive rather than reactive approach. In the case of the Academy, it would have allowed it to have taken the initiative. The Oscars has been struggling for ratings and relevance and 2022 was supposed to be a reset, yet failures in corporate governance undermined this.

The Oscars debacle illustrates the importance of corporate governance, a clear and coherent company culture and a carefully assessed and agreed ethical compass within an organisation. While Hollywood scandal may seem a million miles away from most company’s day-to-day life the fact is that – with social media especially – all businesses are in the spotlight at all times.

Without clear plans and a well-understood and internally respected ethos, reputational damage can happen quickly and grow exponentially. It might not make global headlines, but if it is within your circle of influence then the impact can be just as great.

And as The Oscars have discovered to their cost, even a slap can deliver a knockout blow.

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