The Context
On 8 February 2026, Morgan McSweeney, the 48-year-old chief of staff who orchestrated Labour’s 2024 landslide victory, resigned. His departure was triggered by the release of Epstein documents linking Peter Mandelson, a man McSweeney advised appointing as US ambassador, to sharing market-sensitive information with the convicted sex offender. Mandelson was removed from the post in September 2025, but the fresh revelations reignited the fire. McSweeney’s statement was a direct admission: “The decision to appoint Peter Mandelson was wrong… I take full responsibility for that advice.” The crisis didn’t stop with him. It now engulfs the Prime Minister, with multiple MPs and peers declaring his position “untenable.” The government mood is described as “frenetic.” A by-election on 26 February could be the final trigger for a leader’s downfall.
The Risk
This is not a political story. It’s a masterclass in reputational contagion. The Court of Public Opinion has delivered its verdict: the leader’s judgment is compromised. The brand is now synonymous with poor vetting and toxic associations. For a Director, this psychosocial damage translates directly to liability. Your duty under the Companies Act 1993 is to act with the care, diligence, and skill of a reasonable director. A failure in due diligence over a key appointment—especially one tied to a figure of profound reputational risk—may indicate a breach of that duty. The public trust you’ve spent years building can evaporate in a week. Your company’s social licence to operate is at stake. When the brand erodes, so does market value, stakeholder confidence, and your own professional standing. The financial and legal repercussions follow the reputational collapse.
The Control
You must treat reputational due diligence with the same forensic rigour as a financial audit. Implement a mandatory, multi-layered vetting protocol for all senior appointments and key third-party relationships. This goes beyond a standard background check. It must include a deep-dive into public record associations, historical controversies, and digital footprint analysis. The protocol must have clear red lines and veto powers, insulated from internal political pressure. Crisis communication plans must be pre-drafted for potential ‘guilt by association’ scenarios. The control is a culture that prizes integrity over expediency.
The Challenge
These are the critical questions you should be raising at the board table:
| Does our current due diligence process have a specific, documented protocol for assessing the reputational risk of a candidate’s past associations, and who has the unambiguous authority to stop an appointment on that basis alone? | |
| When was the last time we stress-tested our crisis communications plan for a scenario where a senior leader’s past judgement is publicly condemned, and does that plan prioritise restoring public trust over protecting internal egos? | |
| What specific, measurable indicators are we monitoring to gauge the erosion of our organisation’s social licence, and is the board prepared to act decisively if those indicators flash red? |