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Innocent as charged

May 28, 2011

What looked like could have been a very positive profile piece in page two of The Guardian at first glance, complete with a box out of the brand’s history and an image of one of the founders, got smoothie maker- innocent drinks into a rather sticky situation.

Source: The Guardian

With 77% of the market share (worth an estimated £150 million), innocent sells more than two million smoothies every week and has been a long favourite with consumers. Despite a few hiccups in past years including its partnership with McDonald’s and a Coca-cola buyout, the brand has suffered limited reputational damages and remained to be a much loved brand.

The company has always been perceived to be open and honest through the effective use of its corporate blog. In the face of crisis or critique, innocent has been quick to respond. Dan Germain, the Head of Creative at innocent said,

Personally, I think the greatest thing is that we’ve been able to have a proper, open debate on our blog. I’m proud that that’s the way we do things at innocent. No smoke, no mirrors.

How ironic this is in light of yesterday’s less than ideal coverage.

An article in The Guardian raised serious questions about innocent and its handling of charity money. Instead of handing over 10% of profits to its charity- the innocent Foundation, it was reported that more than half a million intended for the foundation was kept in the company’s bank account where it could earn more interest.

Innocent responded to The Guardian’s allegations of its corporate governance on their blog. However the response did not address the major points in the article.

Looking at the comments beneath the post sheds some additional light on the situation, which highlights governance failings on two fronts. Firstly, the Trustees of the foundation were also Directors of the company, indicating a possible conflict of interest and secondly the lack of transparency and clarity in how the charity money has been dealt with.

Kudos to the guys at innocent drinks for their speedy response to comments to the post and eventually putting their hands up to apologise and say,

“If the article or our response to it has left anyone feeling the Foundation has been funded or run is not completely above board. We want to reassure everyone that the financial security (and legality) of the Foundation and our ability to honour funding commitments to project partners has never been compromised in any way.”

It appears the best intentions were there but donations to the innocent Foundation may have been poorly managed with the lack of distinction between the company and the charity. Introducing a greater degree of separation can help to avoid conflicts of interest and free them from the risk of questionable financial conduct in the future.


Related posts:

The death of journalism and the rise of churnalism

Rules of Engagement

How to add your blog to Technorati






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