USA – WASHINGTON D.C. Trends and Developments Contributed by: Myron Marlin, Tom Becker, Bill McQuillen and Kate Pulio-Deighton, FTI Consulting
Importance of speed In today’s media environment, a negative sto- ry – whether true or false – can make its way into newsrooms and inboxes before the sub - ject of the news story is able to process what happened. Traders buy or sell, judgements are made, reputations are won or lost – all before any sober assessment of what happened can be made, and well before a company can organise an executive leadership call. Figuring out the actual allegations is usually the first step in gaining control of a situation. Had the company engaged with the reporter weeks earlier, even if only on background, it could have learned more about what it was dealing with. The company would not have needed to pro- vide a comment or reveal any information to the reporter at the time. It could have simply asked the reporter questions about the story to bet- ter understand what the accusations entailed and when the alleged wrongdoing reportedly occurred, among other critical details. To ensure accuracy, most reputable reporters gladly lay out many of the facts that they expect will appear in their articles and give the com- pany a chance to respond. Indeed, many well- sourced reporters understand that their inquiry to a company may be the first time that most of its executives are hearing of the alleged wrong- doing. While every crisis is different and needs to be handled fittingly – whether a factory fire, finan- cial irregularities, or inappropriate conduct by an executive – a company that has time to assess the situation before the crisis becomes public is in a far better position, strategically. The time between discovery and public disclosure pro- vides an opportunity for the company to take the right actions – develop a statement, prepare
communications for the relevant audiences, identify potential third-party validators, and shape the overarching message. Most impor- tantly, it gives the company time to consider the substantive reforms it should implement so it has a better, more responsive message to convey. Time in your favour: when a crisis is not immediately disclosed publicly With most allegations of serious wrongdoing, a responsible company will hire outside counsel to launch an investigation to determine whether the misconduct in fact occurred, who was involved, what policies may have incentivised the wrong- doing, and how widespread it may be. The com- pany, with outside legal counsel input, may even decide to voluntarily disclose the situation to its regulators. Early on, there may be little a company can say, but even acknowledging that it has launched an investigation is significant. The very act of conducting the investigation demonstrates that the company is taking the matter seriously and is committed to finding out what happened. It sends a subtle message that the conduct does not reflect the values of the company, and the company plans to get to the bottom of it. It also gives the company the ability to legitimately shut down most inquiries because it, too, is trying to understand what happened. It telegraphs that management has questions and is demanding answers. At the same time, the period during which the investigation is underway allows the company the chance to reassess its policies and take steps that will demonstrate the company is a responsible corporate citizen. Working with out- side legal counsel, the crisis communications team can inquire as to whether certain policies may have inadvertently enabled the wrongdoing,
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