Surviving a Corporate Crisis - 100 things you need to know

Overview

In light of the current economic climate, it is absolutely vital for companies to have a corporate crisis management system in place.

While a corporate crisis can occur due to unstable position of the global financial markets or due to natural disasters, it is how organisations deal with it that defines their further existence. Many organisations, like BP Plc, have not have had effective corporate management system in place, which resulted in major loses within shares value and reputation damage.

This could have however been overturned to the right direction, with a proper corporate crisis system in place. Johnson & Johnson’s successfully managed their cyanide crisis by acting quickly with setting up a 7-member strategy team, putting consumer safety above all else, and thereby strategically restoring customer confidence.

What are the Benefits of this Report?

This Report not only covers remedial action after the event but it also offers expert advice on preparation and planning so that, should a crisis occur, damage of every kind is limited as far as possible.

It guides you through the various stages of setting up a viable crisis response capability and provides answers to key questions that every CEO should want to ask – and that every Corporate Crisis Manager should be able to answer.

Who will benefit from this Report?

This Report is designed primarily for those directors and senior managers who are concerned that their organisations may not be adequately prepared to deal effectively with the unthinkable – a corporate crisis that threatens the very existence of their business. It will also be of use to officers who are charged personally with maintaining crisis management systems, if only to prepare them for the questions that they will be asked once their seniors have read the report.

Content

1 Starting at the beginning – crisis avoidance

• Internal controls
• Board responsibilities
• Internal and external risks
• The domino effect
• When avoidance is not an option
• Contingency plans
• Changing risks
• Basic controls

2 Defining crisis management strategy

• What is a crisis?
• Cost
• Duration
• Extent
• Reputational impact
• Crisis trigger points
• Infrastructure
• Mission
• State of readiness
• The crisis management framework

3 Command and control

• Crisis management team
• Team make-up
• Deputies
• Reserves
• Leadership
• Invocation procedures
• How the crisis manifests itself
• When the crisis occurs
• The mechanism for passing crisis information
• Code-words
• How a crisis is declared
• Activating the crisis management team
• The crisis centre
• Crisis support staff
• Managing the crisis
• Documentation
• The crisis log
• Command and control summary

4 Communications

• Crisis notification
• Staff awareness
• Assessing crisis notification calls
• Activating the crisis management team
• Contacting the team leader
• Fallback arrangements
• Contacting the rest of the crisis management team and support staff
• Managing the crisis
• The public relations team
• The human resources team
• Communications cascades

5 Organising the media interface

• Media attention
• Reputational damage
• Sources of information
• The front man
• Media training
• The media fixer
• The right messages
• The official line
• Command and control
• Media interface summary

6 Action teams/plans

• Action teams
• Terms of reference
• Normal action plan invocation sequence
• Phase 1
• Phase 2
• Phase 3
• Non-essential functions
• Reserve skills register
• Action plans
• Getting the structure right
• Action plan pro-forma
• Considering draft action plans
• Retention of action plans
• Review of action plans
• Summary of action teams/plans

7 Maintaining the crisis management infrastructure

• The crisis management manual
• Extracts from the manual
• Problem areas
• Team leaders, deputies and team members
• The right team members
• External contact lists
• Communications cascades
• Action plans
• The crisis centre
• Information, training and testing
• Summary of maintaining the crisis management infrastructure

8 Testing the state of readiness

• The benefits of testing
• The test plan
• Independent review of the plan
• The test plan period
• Types of test
• Compliance testing
• Desktop testing
• Organising a desktop test
• Full testing
• Acid testing
• Organising an acid test
• Acid testing the crisis management team
• Composite testing
• Summary of state of readiness

Appendices

• 1 CRISIS MANAGEMENT TEAM CHECKLIST
• 2 THE CRISIS LOG
• 3 DEPARTMENTAL ACTION PLAN
• 4 THE CONTACT REGISTER
• 5 RECENT CORPORATE CRISES

The author

Paul Batchelor is a Fellow of the Association of Chartered Certified Accountants. Currently a Director of Professional Interim Management Services Limited, he has almost 20 years experience in senior roles in the UK retail financial services sector, recently specialising in internal audit, compliance, special investigations and risk management.

Over a five-year period, he was responsible for creating, maintaining and testing the business resumption planning capabilities of a leading UK financial services group.

Paul was a member of the U.K. financial services society committee of a major international accounting body for ten years, serving as Vice-Chairman and Deputy Chairman over a four-year period and Chairman for three years.

At a time when the threat to business stability has never been greater, he has drawn on this experience to produce a report that sets out the basic principles of crisis management for all businesses.