USA – WASHINGTON D.C. Trends and Developments Contributed by: Myron Marlin, Tom Becker, Bill McQuillen and Kate Pulio-Deighton, FTI Consulting
assess and plan for those risks before a crisis occurs – be they commercial risks, regulatory risks, legal risks or reputational risks. For instance, one member of the executive team may be most concerned by a potentially large jury award, while others may harbour concerns about a regulator calling, boycotts, protests, investor flight or the severing of contracts. While a jury award, regulatory penalty or fine could be easily paid in a day, executives need to weigh the reputational damage that the company could be paying for years to come. It may also be necessary to implement an early warning monitoring system to identify and flag risks that may seem remote but are worth keep- ing an eye on. Sort of like when NASA flags a meteor that has 1% chance of making contact with Earth. It is remote, but certainly something to monitor. Such a risk assessment helps to focus the company’s attention. But it requires more than understanding the business and speaking to those in leadership. It also requires listening to voices from outside the company who may have a perspective the executive team does not. What are the risks that consumers, suppliers or local residents fear most? For some, it could be a plant explosion or a factory closure. For others, it could be a product recall or financial impropri- ety. Companies therefore need to evaluate and manage their relationships with a host of stake- holders, including business partners, investors, employees, members of Congress, local elected officials and other relevant audiences. Determin- ing who the company should prioritise commu- nicating with in a crisis, and how, is critical.
Starting with the most vital and relevant rela- tionships, companies should assess how those relationships may be impacted by a crisis and how they can be preserved. If a key partner in the supply chain could lose sales as a result, that relationship may be vulnerable. Such rela- tionships, and how they are safeguarded amid a crisis, therefore, become part of the company’s risk assessment. When the risks and the stakes are known, com- panies can tailor a well-informed plan before a crisis hits. Advance awareness of these risks provides an opportunity to focus on key relationships and improve practices before they come to light. This can include reshaping the company’s owned content on its website and social channels to build the confidence of partners and customers. It may include building and nurturing relation- ships with key media outlets, so they understand the company’s mission before a negative news event. It could also include establishing a dia- logue with local elected officials and political fig- ures, so they appreciate the role the company plays in the community or a given industry. Most critically, it should identify the other third- party organisations and relationships that could influence those stakeholders. Direct engage- ment is one thing. What is often missed is cre- ating an environment that organically reinforces a company’s messages through third-party voices. Companies that take advantage of the quiet moments to thoughtfully strengthen these relationships have a clear advantage. Knowing its vulnerabilities, a company can make improvements that might circumvent a crisis before it unfolds or at least prepare the com- pany to know where the issue may come from,
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