NEW YORK — The first panel of the 2nd Annual Corporate Counsel Leadership Forum didn’t waste any time in addressing one of the most vital and potentially most damaging (if handled poorly) duties of the general counsel’s office: managing any crisis that arises, especially when the flames of such situations can be fanned by social media and the spread of news and rumor over the Internet.
Indeed, today’s environment of ubiquitous social media use, 24-hour news cycles and damaging viral videos have greatly ratcheted up the pressure on companies to respond immediately to every crisis before it spins out of control, panelists said. “If you just look at it from a social media sense, it seems there is much more crisis going on,” said panelist Michael Brizel, General Counsel of FreshDirect. “But as GCs we should provide some measure of reassurance and help our companies sort through the noise.”
The panel, entitled Mission Critical: The Role of the General Counsel in Managing Corporate Relations and Public Opinion was moderated by Juda Engelmayer, Senior Vice President at 5W; and featured speakers, aside from Brizel, that included Jonathan Brennan, Managing Director and Associate General Counsel at Bank of America; Justin Connor, Director of Chief Legal Officer Services for the Association of Corporate Counsel (ACC); and Michael Fricklas, General Counsel of Viacom.
Today’s environment of ubiquitous social media use, 24-hour news cycles and damaging viral videos have greatly ratcheted up the pressure on companies to respond immediately to every crisis before it spins out of control.
The panelists outlined a three-step approach to handling crises properly — preparation, response and recovery — and said pre-planning for a potential crisis may be the most important step. ACC’s Connor noted that an informal survey from a recent crisis management discussion showed that less than one-quarter of companies have a plan in place to handle any crisis that may arise. And a show of hands at this panel confirmed that percentage as well.
“And this is why general counsels have to take such and outsized role in crisis management,” Connor said, adding that for example, a communication plan, made known within the firm ahead of time, is crucial. “One thing you don’t want to do during a crisis situation is have to walk-back inaccurate information that has been released,” he said.
FreshDirect’s Brizel agreed. “I think one of the most important tasks the GC has in preparing a crisis management plan is identifying which people within the organization will handle crisis well and can be depended on to do what is needed during a crisis,” he explained.
Brennan, of Bank of America, underscored the importance of determining a communication plan well ahead of any crisis because once a crisis hits, if there is no plan in place there will be chaos. “The worse thing you can have is a scrum of people going for the ball and trying to resolve or explain the crisis to the public,” he said.
But what has changed to make crisis communications so much more important today?
Primarily, several panelists said, the astronomically increased speed at which information (and, of course, mis-information) travels around the world, allowing a smaller and smaller window in which companies can properly and accurately respond. “The old approach of ‘No comment’ doesn’t work anymore,” said one panelist. “There is tremendous pressure on companies to respond quickly.”
Other factors have also made today’s environment more critical for responsible crisis management, such as the politicization of the regulatory environment, the propensity toward consumer or shareholder litigation and even the dangers of a bad customer experience “going viral” and damaging the company’s reputation in the marketplace.
“All these potential crisis situations have one thing in common,” said another panelist. “You have to be aware of how you are responding to things and the way communication is being conducted both inside and outside the company.”