April 04, 2017

The Board of Directors' Role in Crisis Management

Protecting an organization’s reputation is one of the most important responsibilities of directors today. But what, exactly, is the director’s role in crisis management?

While boards do not typically respond to a crisis operationally or publicly, the directors’ role as fiduciary and strategic stewards of the organization means they must be prepared for reputation risks. Preparedness ensures that the board will be capable of moving quickly to solve problems in keeping with company values and governance policies.

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Here are some questions board members should ask BEFORE a crisis:

  • Does our organization have a crisis management plan?
  • What is my legal liability as a board member?
  • Does the organization routinely review and prepare for a crisis?
  • Who on the board is responsible for crisis management?
  • Who is the board spokesperson?

When a crisis hits, remember these points:

  • Don’t assume the administration has it under control
  • Be an independent thinker
  • Understand your personal liability
  • Assess whether or not board spokesperson needs media training
  • Ensure that communications and legal counsel are at the table together
  • Know who is empowered to speak, and when

Before communicating with shareholders or others, be sure that you understand your organization’s governance principles around public statements. More than anything, remember to listen. Investors, in particular, want to be heard.

Learn more about warning signs of a smoldering crisis.

Learn more about how to respond to a government investigation.