When billions of dollars worth of financial auditing and legal-advisory services flow through your offices each year, it's important to reassure clients that your firm is diligent, detail-oriented and cautious. So when a representative from PricewaterhouseCoopers LLP couldn't keep a couple of envelopes straight at the Academy Awards on Sunday night, it was more than an embarrassing flub. It was a symbolic hit to what the firm's brand stands for.
The confusion occurred in the waning moments of the Oscars broadcast, when actor Warren Beatty opened what he believed to be the envelope containing the winner for best picture – and as he explained minutes later after the award had been mistakenly given to La La Land, he saw the best actress card for La La Land star Emma Stone instead. A visibly confused Mr. Beatty handed the envelope to co-presenter Faye Dunaway, who read out the movie title. In reality, the winner was Moonlight.
Within hours, PwC posted an apology on social media. "The presenters had mistakenly been given the wrong category envelope and when discovered, was immediately corrected," the firm said in its statement. "We are currently investigating how this could have happened, and deeply regret that this occurred."
On Monday evening, the firm provided an explanation: "PwC Partner Brian Cullinan mistakenly handed the back-up envelope for Actress in a Leading Role instead of the envelope for Best Picture to presenters Warren Beatty and Faye Dunaway. Once the error occurred, protocols for correcting it were not followed through quickly enough by Mr. Cullinan or his partner," PwC said in a statement.
"We are deeply sorry for the disappointment suffered by the cast and crew of La La Land and Moonlight," PwC wrote. "For the past 83 years, the Academy has entrusted PwC with the integrity of the awards process during the ceremony, and last night we failed the Academy."
PwC's representatives are the only ones who know the results before the show airs, and are responsible for handing the correct envelopes to presenters as they walk on stage.
Their presence at the event is both a job for PwC, and also its most high-profile marketing event of the year.
"We have the winners in sealed envelopes that we hold and maintain throughout the evening, and hand those to the presenters just before they walk out onstage," Mr. Cullinan said in a promotional video the company posted last week.
"The reason we even first asked to take on this role was because of the reputation PwC has in the marketplace for being a firm of integrity, of accuracy, of confidentiality," Mr. Cullinan said in the video. "But I think it's really just symbolic of how we're thought of, beyond this role, and how our clients think of us."
That symbolism is the biggest problem for PwC's brand.
"If it's a mistake that isn't related to what the brand stands for, I'm less worried. But accuracy of reporting is one of the tenets of PwC," said Katie Sprehe, director of reputation research at Washington-based communications consultancy APCO Worldwide.
"It's as if you have a spy that can't keep his mouth shut," said Gene Grabowski, partner at Washington-based communications firm kglobal, which specializes in crisis communications. "The good news here is that what we're dealing with is a relatively minor mistake in the scheme of things – no one was harmed, no one was injured. … But the symbolism of it is important. If I'm paying PwC millions of dollars to do my accounting correctly, or give me business advice, or do my forensic work – if they can't get an envelope straight, how can I trust them with a multimillion-dollar account?"
PwC itself runs a "Global Crisis Centre" that includes communications advisers, so it has institutional knowledge of reputation management.
The firm should not simply stay quiet and hope the news cycle moves on, experts said. It is important that they follow up to explain how it happened and, more importantly, how they are going to ensure it doesn't happen again.
"Too often we see large corporations pass the buck. They can mitigate some of the impact on their brand by just being honest," Ms. Sprehe said.
The mistake happened on a big enough stage that high-ranking executives at PwC should be speaking up about it -- beyond just a written apology or a single media interview.
"Were I heading up their crisis team today, I would be telling the U.S. chairman to get in the video studio, record what your next steps are, and post it everywhere," said Howard Fencl, vice-president at Cleveland-based Hennes Communications, which specializes in crisis management. "… They need to walk the talk, otherwise [the apology] is empty verbiage."
It's not the first time a presenter was given the wrong envelope: in 1964, Sammy Davis Jr. announced a winner for Best Music Score (adaptation or treatment) who was not among the nominees. "They gave me the wrong envelope? Wait til the NAACP hears about this," he quipped to the crowd, before being handed the correct one.
If the explanation for the error had been an oversight in the system for managing the envelopes, the firm could have simply explained how it would change the system to avoid such missteps in the future. However, earlier on Monday, Mr. Grabowski cautioned that in the case of human error, the person responsible may have to lose their job, at the very least with the Oscar account -- assuming that PwC holds on to it -- but perhaps even at the firm.
"You have to show that you're willing to pay a price," he said. "In my business, the saying is, sometimes the gods demand a sacrifice."