As part of an emerging industry, blockchain companies face both legal and reputational risk in the public sphere. With the spectres of data breaches, litigious behaviour, and regulatory uncertainty ever present, how can blockchain companies best prevent crackdowns by governments, handle media scrutiny, and shape public opinion? We talk to our own insiders about how these companies can define themselves as good actors and improve public perception of their work.
Our guests this week are:
- Jaime Watt, Executive Chairman, Navigator Ltd.
- Mike Van Soelen, Managing Principal, Navigator Ltd.
- Danielle Parr, Principal, Navigator Ltd.
A portion of our discussion with Jaime Watt is transcribed below. Subscribe here to have the Navigator’s latest insights delivered right to your inbox.
Clare: I want to talk about reputation today because it’s something many blockchain companies don’t often think about but probably should. You’ve shepherded a number of organizations through high profile public facing crises and you often talk about the kinds of jeopardy a company faces. Can you explain that concept to our listeners.
Jaime: Sure. Generally speaking we see clients face three kinds of jeopardy. They face legal jeopardy, they face reputational jeopardy, and now they face a new kind of jeopardy which is moral jeopardy. So when you think about it in the old days, the old days are defined to be before the internet before Google, we used to deal with those Jeopardy’s consecutively. Deal with the legal jeopardy get that fixed up you’d move on to the reputational Jeopardy. You don’t have that luxury anymore. You have to deal with them concurrently. And for a lot of organizations that’s a problem because dealing with your legal jeopardy often increases your reputational jeopardy and dealing with reputational jeopardy often increases or exposes you to more legal jeopardy. And now to make things even more complicated, we introduce the first cousin of reputational jeopardy which is moral jeopardy. Looks a lot like reputational jeopardy but it behaves differently. It’s more intense and it’s much faster to come to fruition and to cause you problems and it requires a much faster response.
Clare: On our first episode Don Tapscott pointed out that the blockchain industry now operates in a wild west of sorts. And so I wonder what kind of advice would you give to blockchain companies on how they conduct themselves especially with all the hype that’s around the industry.
Jaime: I would say that the cliche ‘just because you can doesn’t mean you should’ should be the guiding principle. So just because it is the wild west and just because there aren’t regulations doesn’t mean that companies should take advantage of that. I think what they need to do is say not how does a responsible blockchain related company behave but how does a responsible organization behave and put in the kinds of processes the kinds of practices and the kinds of policies that make them a respected organization regardless of what their antecedents are or where they come from. Just because you can doesn’t mean you should.
Clare: Absolutely. In our last episode we were talking about regulation. As a seasoned political adviser yourself do you think blockchain companies should be embracing regulation or should they be trying to find ways to self regulate. I mean what’s the what’s the best path forward.
Jaime: Well I think the best fast forward is to start from the proposition there’s going to be regulation. I just don’t think it’s possible that as this becomes meaningful part of the economy and a meaningful parts of people’s lives the government are going to abdicate what is their responsibility, which is to ensure that the marketplace is well ordered and it’s regulated. So regulation is coming in my view and anybody who thinks it may be very nice to be an idealist and think that this is going to escape that, I don’t buy that for one second. So if regulation is coming and I believe it is, the question then becomes what is the best way to achieve that regulation. And I would suggest the industry get together and propose the regulation itself rather than be exposed to regulation in a developed by bureaucrats who actually have no idea how things work. And you know through the law of unintended consequences may provide regulations which are actually quite harmful and unnecessarily restrictive. So I would say the enlightened practitioner in this area would say regulation is coming. How can we propose a regulatory regime that we can live with. It also delivers as against the public expectation and the public good.
