Wp1 #500451-v1-acc presentation-on_navigating_a_corporate_crisis

Navigating a Corporate Crisis
Pre-Crisis Phase
September 20, 2012

Presented by
Dori K. Stibolt

© 2012 Fox Rothschild LLP

Does your company have a
crisis management plan?


Is this your current crisis
management plan?


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.


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


Role of In-House Counsel
 Educate, educate, and then educate
some more
- 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


 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


 Think about and estimate lost business
per day/per site
 Analyze potential losses related to:
- Business opportunities
- Reduction in market share
- Customer confidence
- Brand/reputation impact


 Prepare Crisis Management Plan.
- 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


Potential Corporate Crisis
 Product recall or product safety issues


 Federal or State investigation or
enforcement action


 Attacks by consumer advocacy groups


 Serious injuries involving your product or
service


 Major infrastructure failure/supply chain
disruption


 Executives or officers are indicted or
arrested


 Natural disaster or fires


 A whistleblower
employee


Risk Audit
 What could disrupt our business?
 Short Term disruptions
 Long Term disruptions
 Look to your comparators
 Review and analyze past crises
 Identify your vulnerabilities


Risk Audit
 Financial
 Strategic
 Operational
 Compliance
 Reputational


Crisis Management Team
 Who should be on the team?
 A well thought out team should include:
- Management
- Legal
- Operations
- IT
- Public relations
- Human resources
- Business units


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.

Prepare Your Plan
 Components of a crisis management
plan:
- Executive summary
- Crisis Management policy
- Types of events covered by the plan
- Response plan
- Crisis communication plan


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


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


Prepare Your Plan
 Design is important
- Easy to read type
- Understandable sub headings
- Index
- Flow Charts
- Lists
 Contemplate having a first hour check list


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


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:
- A product recall
- An injury due to your product/service
- A visit by law enforcement
- A weather event


Prepare Your Plan
 Develop crisis communication plan
- 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


Prepare Your Plan
- 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


Prepare Your Plan
- 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


Prepare Your Plan
- 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


Prepare Your Plan
- Develop positive messages for your crisis
response
 Safety record
 Family owned
 Community and charitable giving

- Be certain employees know who the
authorized spoke person is and they further
should be trained to not respond to media


Prepare Your Plan
- 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


Prepare Your Plan
- 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


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


Now What??


Contact Information

Dori K. Stibolt
DStibolt@foxrothschild.com
561.804.4417


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