• Garth Callender

Fashionista’s woes continue

This Week - Fashionista’s woes continue, bank non-disclosure of medical records loss and the ABC board remains distracted.



Dolce & Gabbana's social media crisis compounds

Dolce & Gabbana stake in the Chinese markets continues to erode as the duo make an online video apology.

  • As reported last week, a poorly considered marketing campaign was the catalyst for a chain of negative events amid ongoing Chinese consumer backlash.

  • While the founders, Stefano Gabbana and Domenico Dolce, have now made an online video apology, the elephant in the room, Stefano Gabbana’s racist comments on Instagram and claim that the account was hacked, were not addressed. To date the pair have offered nothing to substantiate the hacking claim.

  • The ad-hoc response by the company has resulted in numerous stores removing their brand stock from shelves and online stores, the resignation of high-profile celebrity brand ambassadors amid calls to boycott the brand. The most extreme was the report of a former fan of the brand setting fire to over US$20,000 worth of D&G products and posting it online.

  • Dolce & Gabbana appear to be relying on their online apology to get them out of hot water and have done little else to appease Chinese consumers that makes up one third of the company’s overall sales. This event highlights how an incident can quickly compound, and why a response must demonstrate sincerity plus a willingness to truly take responsibility rather just delivering a communications exercise.

Commonwealth Bank chooses not to disclose potential data breach of customers' medical data

In late July the Commonwealth Bank discovered a data breach that allowed access of an undisclosed number of customer’s sensitive medical records. Reportedly the information was made available to other arms of the bank, including to staff who decide whether to approve or decline loan applications.

  • The that the Commonwealth Bank is investigating the data breach that may have given its staff access to customers' sensitive medical information.

  • The issue was discovered as the bank prepared for the $3.8 billion sale of its insurance arm, CommInsure, to the AIA group. The bank says it has not found evidence any data was accessed from outside the insurance arm, but it is still investigating further.

  • While ASIC and APRA have been informed the bank has chosen not to inform affected customers. They are instead claiming that the incident does not constitute a notifiable incident under the ‘Notifiable Data Breaches scheme’.

  • While this may be true by the letter of the law, it can also be argued that such a breach, even if it did not form part of the lending decision-making criteria, is not in line with community expectations.

  • This allegation comes at a time when the bank's chief executive, Matt Comyn, and chairman, Catherine Livingstone, have come under fire by the Royal Commission over the bank's culture and several other scandals.

ABC Board consumed by the fallout of the Senate Inquiry

Since the September sacking of ABC Managing Director Michelle Guthrie and the resignation of the Chair Justin Milne (pictured during happier times), the ABC board has faced nothing but turmoil.

  • The troubles have ranged from a Four Corners expose where the findings were kept secret from the board until its airing, ongoing allegations of unfair dismissal, claims of board and government meddling in staffing, and questions around emails that look to be used as leverage by the beleaguered managing director.

  • This week a Senate Inquiry into the allegations of political interference in the ABC has not only shed light on the events in September but has likely continued to distract the board from their primary fiduciary duties of setting the direction, strategy and culture of the broadcaster.

  • Interestingly, one key outcome of the inquiry has been criticism of the current ABC Board (including from current board directors) that the group lacks the required media and public sector experience.

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