USA – WASHINGTON D.C. Trends and Developments Contributed by: Myron Marlin, Tom Becker, Bill McQuillen and Kate Pulio-Deighton, FTI Consulting
warranting a change in those policies. Outside counsel can also determine whether there may be a need for corrective action against those individuals involved, changes in reporting struc- ture, additional employee trainings, enhanced compliance programmes and/or reporting resources, such as a confidential hotline. These possible reforms may not only benefit the legal strategy and address the underlying issue; they can shape a narrative that appropri- ately portrays the company in a positive light. If there is ultimately a criminal or civil settlement with a government agency, the company’s state- ments can be forward looking, focusing on the relevant reforms that have been implemented or are underway. In short, good crisis communications relies on good crisis management – as they go hand-in- hand. Rather than gearing up to merely defend the alleged wrongdoing, the company should prepare to focus its messaging on the new reforms and its prospects for the future. The value of crisis preparation when the crisis hits without warning In many crises, a company has no advance warning, learning of the situation at the same time as the public. While that means the com- pany may not have much time to organise a response, it does not mean the company should not be prepared with a plan to respond. Today, many management teams develop cri- sis preparedness plans and rehearse how they would react to a given scenario through tabletop exercises. It is not practical to develop plans for every possible event, but an overarching crisis management plan with the company’s pertinent protocols and procedures can be incredibly use- ful, especially when they are put in practice dur-
ing an exercise. Even if an actual crisis is differ- ent from a rehearsed scenario, these exercises help senior leaders develop the appropriate muscle memory to follow the company’s esca- lation protocols, crisis response structure, and dedicated roles and responsibilities. The tabletop session also helps ensure that all leaders and external advisors are on the same page about who should be involved in the company’s crisis response efforts, respec- tive responsibilities, decision-making processes and how information is shared between teams across the company throughout the crisis. In many such exercises, senior leaders learn for the first time how much actually takes place within their own organisation during a crisis. They discover that the investor relations team fields many calls from their top investors demanding answers and that reporters ask often unanswer- able questions of the company’s spokespeople. They quickly appreciate that the sales force, which may be bombarded with questions from customers affected or unaffected by the event, needs to be equipped with responses. And they come to appreciate that mid-level management need guidance on how to engage with anxious employees who may fear for their jobs, safety or the company’s future. During these tabletop exercises, a company’s senior leaders have an honest conversation about how bad things could get. While the worst-case scenario may not happen, manage- ment learns to be aware of what is possible and prepare to respond accordingly. Managing risk before, during and after a crisis The risks associated with crises are copious. Leaders of any company would be wise to
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