Reputation management in today’s AI-driven world

The role of traditional PR and conventional reputation management has been significantly upended by the rising dominance of artificial intelligence. UHNW individuals can no longer assume that their personal reputations, and those of their family offices or portfolio businesses, can be adequately protected using traditional strategies.

‘Reputation’ is now primarily manifest in Search, where AI has not only eroded the power of legacy media, it has also widened the scope of source content which is used to determine and then present who a UNHW or family office is – the ‘true position’.

In this new AI paradigm, reputation is moving out of humans’ hands into AI’s—at the exact moment when it is becoming critical to most outcomes

“You need to be real. You need to actually do something. We work strategically with UHNW individuals and their families to help manifest the reputation they want for a world where AI also means that reputation is becoming a primary vector of success for almost all UHNW and family office outcomes,” comments Michael Macfarlane, the eponymous founder of Michael Macfarlane Associates, a London-based global reputation management specialist that works to curate future-proof reputations.

Many of its clients come from parts of the world that have enjoyed substantial growth in the last 15 to 20 years: Hong Kong, Singapore, Taiwan, Mainland China, and the Middle East. This includes some of Asia’s wealthiest and most prestigious families, ranging from first-generation family members to fourth-generation family members. The firm operates with utmost privacy and discretion but has become an open secret within UHNWI communities as these clients become increasingly global in their ambitions.

“They’re looking for what’s next,” says Macfarlane. “How can I transact globally without friction? How can I deploy reputation to build value? How can I protect my family and interests? How can I be more impactful as a philanthropist? What will my legacy be?”

Reputation is the biggest unmanaged risk in most family offices

For single-family offices, reputation is often the biggest unmanaged risk they face, often unwittingly. A single piece of negative exposure could mean that someone is no longer at the front of the queue for deal flow or is no longer desirable as a philanthropic partner. Macfarlane describes situations where what started as a seemingly innocuous reputation challenge caused hundreds of millions of dollars in damage.

In the current global regulatory environment, having an AI-verified reputation is also, in Macfarlane’s view, a prerequisite to transact globally without friction. AML and KYC systems are also significantly more powerful because of AI. Global banks, cognizant of protecting their own reputations, are more forensic than ever in their diligence of clients, especially when large sums of money are involved.

Verifying one’s reputation is a different beast to prior decades, where everything relied upon passive algorithms with no capacity to verify, to interpret meaning or to make an informed judgement. Before the emergence of democratised media, it also used to be a lot easier to prevent media stories from seeing the light of day. That’s no longer the reality. With AI mediating reputation, and the high-risk-velocity of information, the notion of ‘controlling’ an adverse story is becoming obsolete.

AI-powered search

For two decades, Google’s search algorithms had been based on ascribing ‘trust’ to information sources, with a focus on ‘known’ media titles. The higher the quality of a media title, the higher Google will rank it in search results. But AI-powered search takes the result, for example, a Bloomberg article, and scans all data points of the internet to weigh up the strengths of its claims. AI can read news articles and blogs, ‘read’ videos and podcasts and images, and can even interpret meaning. It can then make an intelligent determination about what is the ‘true position’ about a UHNWI or family and what it will show in search results.

This ability to cast the net wider to ‘verify’ has broad implications, because if AI can’t verify what Bloomberg says, it won’t place it at the top of the search. Reputation is no longer mediated by algorithms placing trust in media sources, but by AI that can ‘trust but verify’.

As a result, being prepared to manage their profiles in a highly creative and holistic way that gives them “verifiable substance”, will matter greatly for ambitious families who want to be more global in their activities.

“The notion that your search engine gives you pages of links that you have to decide which ones to click on, go through, form an opinion, will also seem outdated in the next couple of years,” says Macfarlane. “The future of Search is one of AI-decided aggregation of information in one place, with a heavy lean toward audio-visual mediums.”

This is part of a wider transition to a world of omnipresent AI where reputation is a primary success vector for almost anything any UHNW family wishes to achieve. Consequently, creating what Macfarlane calls “creative substance” will come into ever-sharper relief.

Enabling friction-free global outcomes

Taking ownership of one’s profile in an AI-driven world also matters at a time when legacy media is seemingly in decline. Negative media coverage is still to be guarded against, of course. But legacy media no longer holds the same power it once did. Many of the world’s oldest titles are under pressure and resorting to clickbait to capture their audience. It is a race to the bottom, quality-wise, with many journalists under pressure to generate clickbait.

“In some parts of the world the emphasis on quality has diminished, and traditional media are operating on an ‘ask forgiveness rather than permission’ philosophy because journalists are not given enough time for proper due diligence on a story. The risk of a media title writing something bad about a wealthy family without giving that family the opportunity to clarify what the true position is, is incredibly high,” suggests Macfarlane.

“The other side of this is that mainstream media, whilst still hugely important, is no longer definitive to reputation” says Macfarlane. “If a UHNW family has invested in building a resilient and resistant AI-focused reputation that has substance and which embraces creativity, then AI should detect when an adverse media story does not stack up against what it views as the ‘true position’ and will ascribe less value to it within search results”.

In this new AI paradigm, reputation is moving out of humans’ hands into AI’s—at the exact moment when it is becoming critical to most outcomes.

That has a big impact on the traditional world of PR, which historically focused its efforts on mainstream media. The proliferation of independent journalism and content creation, led by platforms such as Substack and YouTube, has also completely atomised the world of traditional media. Managing someone’s media reputation has become infinitely more complex. If a story gets written on a UHNW individual or family, the high-risk-velocity of information enables a contagion which means that containing a story is difficult.

“Gaps in reputation are also an opportunity for adversaries to present other content. That creates friction. It slows you down. Everything we do is about enabling our clients to act and transact without friction – to proactively substantiate who they are,” asserts Macfarlane.

Litigation is weaponising reputation

It also opens up an increasingly harmful attack vector: litigation funding. This has become a popular investment strategy among fund managers in recent years, where tactics are employed by law firms to diminish someone’s reputation in order to force through settlements prior to their ever reaching the courtroom. This goes far beyond the legal merits of a case.

“If you’re fighting a litigation, then sure you’ve got legal tactics, but law firms recognise that they can pressure UHNW individuals towards a settlement entered into purely to protect their reputation. The potential damage than can be done is huge,” says Macfarlane.

The mere allegation of impropriety can damage a company or an individual’s reputation. Such weaponisation of reputation changes the entire dynamic of litigation. In 2024, the market for litigation funding was valued at $23.5 billion. It is projected to reach $59.7 billion by 2034.

“We’re increasingly seeing counterparties engaging in activities to exert non-legal pressure in cases, where the hand of a UHNWI principal or family member is effectively forced into making a settlement even when there is almost zero legal merit to claim”.

“UHNW families are seen as good targets because they have reputations and the financial means to pay settlements. Investors in litigation funding don’t want the costs of a Courtroom, and so the impetus shifts to non-legal tactics to induce settlements. UHNW families are too often wide open to this risk, and increasingly we find ourselves working in concert with law firms to design countermeasure and mitigation solutions to improve a clients’ position.”

Reputation management has always been a high priority for the world’s wealthiest families. But the shift to a world of omnipresent AI necessitates new thinking and new strategies.

This is a Partner Content article from Michael Macfarlane Associates.  To get in touch with Michael Macfarlane Associates, please email: [email protected]