In crisis management, response time is critical. It takes years to build a strong reputation for the company, but only hours to dismantle it. Despite mitigation efforts, companies can face environmental, man-made or technology-related threats at any time.
The sooner an effective response can be initiated, the less chance of escalating the incident, adversely affecting the facility, employees, environment and the overall reputation of the company.
Corporate governance in times of crisis
Corporate crises come in a variety of forms, ranging from a minor social media glitch to mass casualty cases. Crisis resolution requires media communication and actionable procedures.
In order to work quickly, companies need to prepare a crisis management plan with flexible but predetermined responses and procedures. Proactive crisis contacts and responses vary depending on the nature of the situation, location and time of occurrence.
Regardless of the circumstances, each crisis has the potential to adversely affect the company’s short- and long-term reputation, day-to-day operations, and financial performance. A properly implemented crisis management plan can lead to:
- Resolving the crisis
- Business as usual continues
- Preserved or improved institutional reputation
- Financial sustainability
Therefore, it is important that a basic framework for crisis management, response measures, and communication strategies be developed before the crisis actually occurs.
Corporate governance in times of crisis
The most successful responses are produced from a prepared strategy, with a collaborative understanding of response roles and responsibilities. Since each crisis is unique and has varying degrees of impact, each crisis must be assessed and resolved separately based on:
Potential impact on employees and the company.
Stakeholders interested in the outcome of the incident.
- The level of control of the company on the situation.
The complexity of the crisis and the specialists required.
The following crisis management levels can serve as a guide to determining the degree of impact and response (responses) required.
The first level of crisis:
Minimum threat to life, property or environment:
- There is no medical treatment other than basic first aid
- There is no danger to the public
- A site-level incident limited to the direct work area.
- Minimum estimated damage to property for the company’s facilities or equipment
- No media/actual or potential public interest
- Minimal impact on the company’s day-to-day operations
Level 2 in crisis:
- Limited damage to the company’s property, but has a slight likelihood of off-site migration
- Injury or illness of an employee, contractor or third party requiring specialized medical treatment
- Limited gas release or simple chemical/serious spill requiring regulatory reports
- Average estimated loss of property or financial damage due to fines, penalties or repairs
- Notification or interaction of the staff member with appropriate government agencies
- A security threat that poses a potential threat to the company or the public
- An environmental, health or safety problem that can have a significant negative impact on the company’s reputation
- An event that may affect the company’s operations
Level 3 in crisis:
- A major event that poses a serious risk to life and/or property and/or the environment
- Any death, injury or illness of a member of the public
- Any death, injury or illness of a company employee or contractor
- The event cannot be mitigated without support for local government resources
- Fire, rupture of the pipeline or explosion involving the company’s facilities
- Spill of a chemical/hazardous substance that can be transmitted off-site
- An event that causes major disruption or shutdown of operations
- Significantly disrupts scheduled customer deliveries
- Large property or financial loss
Corporate governance in times of crisis
While specific circumstances will determine the crisis response strategy, basic communications usually remain constant. If the crisis is called for, the pre-defined crisis management team will be responsible for developing a media strategy, public data and key messages, as well as identifying and briefing one or more spokespersons to deliver pre-approved messages to the media. A specific individual or individuals must be assigned to the media/public relations to ensure consistency of messages and availability of information.
