January 02, 2016

Reputation Risks: Government investigations

When the government comes knocking, are you ready? It happens every day.

You get the call:

…thousands of client files stolen by a hacker

…serious accusations of financial malfeasance

…reports of sexual harassment

…a lawsuit by a competitor

…a whistleblower complaining of fraud

a government agent at the door with a search warrant

You think you’re ready. You have a search warrant team in place. You’ve designated someone to coordinate the response.  You’ve trained your employees how to react.  You have adequate document retention and electronic information policies. You have top-notch outside legal counsel.

As CEO, COO, or General Counsel, you have received a variety of calls that have tremendous impact on your company’s bottom line. You’ve thought of all the business, operational and legal risks you may face and you have prepared.

But has your team contemplated the reputational risks it may face and created a plan to mitigate those risks by communicating with your stakeholders directly - before, during and after a crisis hits?

Many companies have strong plans for disaster scenarios: a fire destroys a key facility and is closed for weeks; an incident of workplace violence leaves your employees afraid and vulnerable; a weather disaster impacts your operations. But what about the risks that have the potential to harm the corporate reputation that you have struggled so hard to build and maintain? Who decides if a situation has the potential to cause reputational damage to your company and what’s the plan when the answer is, “Yes, it does?”

Having a communications plan in place to guide your company’s responses to stakeholders in a crisis is a key to mitigating the impact of these situations on your company’s reputation. Being prepared before a situation engulfs your organization can help ensure consistent messaging and orderly, proactive distribution of critical (often sensitive) information to stakeholders, including boards, owners, employees, customers and the media.

At a minimum, companies should consider the following to prepare for reputational risk:

  • Establish a crisis management team to survey the situation and devise a strategy. Maintain that team at all times, not just when the government comes knocking.
  • Determine the nature of the situation and quickly work to understand the problem. Learn the timeline. If information is still unknown, create a plan for collecting it. Ascertain what role your company played in creating the issue, how are you responding to the crisis and who is impacted by it.
  • Create an inventory of audiences and vehicles to reach them. Knowing your audiences ahead of time and documenting how you will reach them in a time of crisis is critical to effective communications. Thinking about how your various audiences will receive this news can be helpful in determining the level of seriousness this situation presents.
  • Determine the level of crisis. While any crisis can quickly become a significant public issue, particularly if not well responded to initially, most crisis situations will likely never become “public” (generating questions from the media, external officials or a wide swath of your customer base). However, many lower level crisis situations will require at least some communications.
  • Plan for next steps. Know the plan for returning to normal business, resolving the issue and ensuring your stakeholders that you have command of the situation.
  • Prepare a media strategy. While there may be a temptation to avoid the media, not responding can make it appear as if the company is defensive, hiding information or in some way acknowledging wrong-doing. Directly reporting your version of the story ensures that you have the chance to get the facts out publicly.

The Peacetime Plan

A company’s best defense is having a clear set of corporate policies that are widely disseminated. While these corporate policies will not prevent misconduct, they can help the organization communicate that workforce expectations have been made clear and that certain acts of misconduct are in clear violation of company policies. Additionally, posting these policies on the company website can also help reinforce the notion that you are committed to the values reflected in these policies.

Reach out to your audiences when times are good. This includes regulators, elected officials, neighbors, board members, clients, employees, vendors, and partners. The first time you communicate with these groups should not be when you are informing them of a government investigation, sexual harassment claim made against your leadership, or the closing of a plant due to unsafe manufacturing practices. Informing them of the positive news about your company helps create a relationship that may prove beneficial when times are not so good. It also helps ensure that you know how to reach them when you have to.

Jill Reilly has led the communications strategies on some of the most high-profile and complex public matters in New England, including the prosecution of James “Whitey” Bulger, the Boston Marathon bombing, the Louise Woodward (“Nanny”) case and the investigation into one of the world’s most infamous art thefts at the Isabella Stuart Gardner Museum.

To learn more about Denterlein’s Crisis Ready Program, call 617-482-0042 or email