Transcript Navigating a Corporate Crisis

Navigating a Corporate Crisis
Pre-Crisis Phase
September 20, 2012
Presented by
Dori K. Stibolt
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Does your company have a
crisis management plan?
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Is this your current crisis
management plan?
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Why do you need a crisis
management plan?
 Crises are unpredictable, but should not
be unexpected
 Since crisis events are generally a
surprise, planning is vital because you
likely will have a short response time
 Protect reputation, market share,
competitive edge, investor confidence
and the long term health of the org.
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Why do you need a crisis
management plan?
 In times of great stress, people revert back to
what they know and how they have been
trained to respond
 As such, if you want your people and your
organization to respond well to a crisis, your
employees need a plan, leadership, and a level
of knowledge and training to respond
appropriately
 Preparation can be the difference between
success and failure
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Role of In-House Counsel
 Educate, educate, and then educate
some more
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Counsel must educate management and the
board of directors that no business is
immune from a crisis
Lobby management to implement and
commit resources ($$$) to a crisis
management plan
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Role of In-House Counsel
 Preparation of a crisis management plan
is going to involve costs
 Provide cost-benefit analysis to upper
management
 When undertaking your risk audit, think
about how many days (or weeks) your
company might be unable to operate per
each potential crisis
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Role of In-House Counsel
 Think about and estimate lost business
per day/per site
 Analyze potential losses related to:
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Business opportunities
Reduction in market share
Customer confidence
Brand/reputation impact
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Role of In-House Counsel
 Prepare Crisis Management Plan.
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Strategize regarding the kinds of crisis that
may impact your company
Undertake a risk audit
Develop a crisis management team
Develop an agreed upon crisis response
philosophy with senior management
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Potential Corporate Crisis
 Product recall or product safety issues
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Potential Corporate Crisis
 Federal or State investigation or
enforcement action
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Potential Corporate Crisis
 Attacks by consumer advocacy groups
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Potential Corporate Crisis
 Serious injuries involving your product or
service
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Potential Corporate Crisis
 Major infrastructure failure/supply chain
disruption
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Potential Corporate Crisis
 Executives or officers are indicted or
arrested
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Potential Corporate Crisis
 Natural disaster or fires
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Potential Corporate Crisis
 A whistleblower
employee
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Risk Audit
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What could disrupt our business?
Short Term disruptions
Long Term disruptions
Look to your comparators
Review and analyze past crises
Identify your vulnerabilities
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Risk Audit
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Financial
Strategic
Operational
Compliance
Reputational
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Crisis Management Team
 Who should be on the team?
 A well thought out team should include:
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Management
Legal
Operations
IT
Public relations
Human resources
Business units
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
The greatest
crisis management plan
 This is called the nuclear football, it is
part of our country’s Mobile Emergency
Command Center
 The President of the United States
utilizes this when he is away from a fixed
command center.
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Components of a crisis management
plan:
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Executive summary
Crisis Management policy
Types of events covered by the plan
Response plan
Crisis communication plan
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Crisis management team should have good
understanding of all aspects of the company
and business
 Depending on team configuration, each team
member may report on their area of the
business or prepare a fact sheet
 Utilize discoveries from the risk audit to
determine probable scenarios to prepare for
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Brainstorm and role play
 Assign other team members as a Devil’s
Advocate committee
 Contemplate and address the worst case
scenarios
 Prioritize
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Design is important
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Easy to read type
Understandable sub headings
Index
Flow Charts
Lists
 Contemplate having a first hour check list
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Include and maintain information on
major projects in-progress
 Assign team members’ responsibilities
 Detailed contact information for team
members and other important individuals
(outside counsel, insurance, utility
companies for a site
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Incorporate your company’s vision and
ethical standards into your plan
 Develop and prepare your response to
the crises that you have identified:
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A product recall
An injury due to your product/service
A visit by law enforcement
A weather event
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Develop crisis communication plan
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You will need an internal crisis
communication team
Assign a person to communicate internally to
employees
Make sure to have a back up person
Communicate accurate information to
employees in a timely manner
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Develop crisis communication plan
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Take charge of communication quickly but
cautiously
Consider making a preliminary statement
Understand the facts and the situation before
making a more detailed statement
Understand the dynamic between admissions and
future litigation
Be aware of and monitoring social media
Be prepared to address any past issue
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Develop crisis communication plan
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Understand who will likely be your audience
in a crisis situation
Employees
 News media
 Site neighbors
 Community Leaders
 Elected official
 Customers
 Stockholders and financial coummunity
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Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Develop crisis communication plan
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Communications during a crisis should be calm,
organized and factual
Establish a predetermined communication center
(and a back-up)
Establish telephone answering procedures for
directing media and emergency inquiries to the
appropriate people
Establish an internal system for communicating with
employees
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Develop crisis communication plan
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Develop positive messages for your crisis
response
Safety record
 Family owned
 Community and charitable giving
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Be certain employees know who the
authorized spoke person is and they further
should be trained to not respond to media
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Develop crisis communication plan
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Act FAST – the media will mobilize quickly
Make the media aware that you want to be
helpful and cooperative
But, do not speculate
Maintain contact information for media
Schedule additional updates both for the
media and employees
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Develop crisis communication plan
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Be aware and appropriate if crisis has
caused death, injury, environmental damage
Providing some media statement is better
than not talking
Do not provide “off the record” or “no
comment” statement
Do tell the truth
Continue to be accessible and responsive
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
 Integrate your crisis management plan
into your company policies and
procedures
 Train your employees
 Practice for an emergency
 Update your plan on a regular basis
 Hold crisis management team meetings
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Now What??
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Contact Information
Dori K. Stibolt
[email protected]
561.804.4417
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP