Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
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- 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:- 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.- 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
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
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:
- 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:- 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- 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:- 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- 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- 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- 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
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
Develop crisis communication 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
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
Develop crisis communication 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
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
Develop crisis communication 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
Navigating a Corporate Crisis
© 2012 Fox Rothschild LLP
Prepare Your Plan
Develop crisis communication 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
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
561.804.4417