Reputation Matters: The Toll of North Carolina's Bathroom Bill
Aaron Perlut | Partner

Oftentimes organizations devalue aspects of marketing as they struggle to put a price tag on reputation. But for anyone paying attention — House Bill 2 (HB2), better known as the State of North Carolina’s controversial “bathroom bill” — has brought clarity to the conversation.

After being signed into law in March 2016, the outcry was swift, loud and broad: The National Basketball Association announced it would move its all-star game, the Justice Department filed a suit challenging the measure, the state’s public university system pledged to defy the statewide law, musicians Bruce Springsteen, Demi Lovato, Nick Jonas, Pearl Jam and Boston (oh no!) canceled concerts in the state; PayPal and Deutsche Bank both said they would cancel plans to expand there, and the NCAA said it would relocate several college athletic championship events for the 2016-17 season that were scheduled to take place in North Carolina.

As the defections piled up, the economic damage born from the reputational mess was clear. In September it was reported the bill had cost the state nearly a half-billion dollars. Yet in October, Gov. McCrory’s top economic official — North Carolina Commerce Secretary John Skvarla — said HB2 “hasn’t moved the needle one iota” as it related to the state’s economic health. Clearly, not a math major.

In the end, Gov. McCrory will soon be ex-Governor, as he recently lost his election bid to Democratic Governor-elect Roy Cooper (wonder why?).  And as he heads for the exit door, McCrory hastily called a special session today to “reconsider existing state legislation,” prompted by the Charlotte City Council’s Monday vote to rescind its LGBT anti-discrimination ordinance, a local law that led to the statewide HB2.

The takeaway? Whether you are a person, place, nonprofit, Fortune 500 or what have you — reputation matters, and if not managed carefully, you’ll pay the toll.

Aaron Perlut

Aaron Perlut is a cofounding partner of Elasticity with some 25 years of diverse experience in journalism, public relations and digital marketing. He is a former senior reputation management counselor at Omnicom company FleishmanHillard, as well as a communications executive for two of the nation's largest energy companies. Throughout his career, Perlut has counseled a range of organizations – Fortune 500s, state governments, professional sports franchises, economic development authorities, well-funded startups and large non-profits – helping manage reputation and market brands across a diverse channels in an evolving media environment.

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