the ceo magazine, crisis management,
Rafael M. Villalobos, Jr., Member at Eckert Seamans

As a CEO, much of your time is spent formulating a vision for the future, identifying the most appropriate strategies, monitoring trends, exploring opportunities to increase revenues and considering methodologies to control and reduce cost.  In a perfect world, your time is supposed to be spent pursuing these noble goals.

In reality, your time is also spent reactively, rather than proactively.  Rather than focusing on strategic initiatives, you spend time dealing with disruptions, errors and the unforeseen.  Such issues come in various forms, from the mundane on one end of the spectrum to infrequent but potentially devastating crises on the other. 

Crises can occur in any organization, at any time.  Crises come in many forms.  Active shooters, explosions, sexual misconduct, chemical spills, death, serious injuries, cyber-attacks, corruption, and criminal indictments are just a few examples to illustrate the point.  Regardless of the type of crisis, the event itself and the attention it receives can have a profound and indelible impact on your organization's financial viability, reputation and the public's trust in your organization and its leadership. 

Some organizations fare better through turmoil than others.  What sets them apart?  Is your organization prepared for a crisis?  How will your organization handle the government ... the lawyers …the media, and the internal divisiveness which may result?  Below are some practical lessons learned by organizations that have been baptized by the fire of crisis.


When the crisis occurs, it is imperative to get out in front of the story.  Organizations must resist the temptation to avoid the media. Rather, organizations must engage with the media and do so almost immediately.  Why?  Because the story will be negative from the outset.. If the organization does not go public and engage, the public will hear one side of the story and it will not be flattering.  A picture will be painted of incompetence, willful wrongdoing, malfeasance and indifference..

It is important to be mindful of different forms of media; television internet and print.  There are deadlines for print media stories to be submitted.  Television news has time slots.  You need to be able to get at least some preliminary written statement in front of the public by these deadlines to help frame the issues. "Company officials did not respond to our requests for a statement", "Company officials declined comment", "Company officials were not available to comment".  What do these statements have in common?  They sound bad..

You should consider having a standing engagement with a communications and public relations company.  A company which knows your industry and your organization and that will be available to you "on speed dial" to react instantly in the event of a crisis.

When dealing with the media, statements need to be heartfelt and empathetic to those who have been impacted as well as their families. Pay close attention to who the spokesperson for the company will be.. The individual needs to be likeable and believable and sincere in their presentation and have sufficient position and gravitas to convey how seriously the organization takes the current crisis.  Close collaboration with legal counsel is highly recommended.


Another factor which must be considered is the role of the plaintiff's bar.  The media loves a good story and plaintiff s lawyers love publicity and notoriety.  These two professions can be sympatico.  Often reporters and plaintiff's lawyers are closely aligned.  One way that this alignment can manifest is through questions posed by members of the media, at the behest of members of the plaintiff's bar.

Litigation is often about putting the rabbit in the hat.  What could be better than catching some corporate executive off-guard with a loaded question, prepared by plaintiff's counsel but asked by a reporter?  It provides for the perfect spontaneous admission of liability.  A perfect sound bite and video clip for the subsequent suit.  Exhibit "A" at trial.


It is not just the corporate executives who must be wary and constrained.  The board of directors is fair game too. They may well be approached by members of the media. What happens when a board member is called or visited at home or work and asked probing questions about a crisis, they may not even know has occurred?  Most people do not deal with the media on a regular basis.  Most people do not have the necessary savvy to field loaded questions.  Yet, they are fair game and their comments will likewise be binding and impactful.

To that end, your organization must have an internal communications plan.  You must be able to reach and brief key stakeholders immediately after a crisis event occurs.  The briefing must also include an admonition that if they are approached by the media, they must refrain from comment other than to express sympathy and refer the reporter to the individual designated by the corporation to handle communications and media relations..


Often policies and procedures will need to be analyzed and changed.  Bad, dangerous or outdated policies can be problematic.  Failure to enforce good policies can be just as problematic.


Your organization will need to disclose the crisis immediately and remain in regular documented communication with your insurance brokers and insurers to avoid potential grounds for denial of claims. Likewise, as soon as is practicable, an evaluation of available coverages needs to be undertaken. Which policies might potentially be triggered?  Which exclusions or limitations on coverage may apply?


Another factor to consider is privilege. Sorting through the various potentially applicable forms of privilege will require assistance from legal counsel. Inadvertent waiver of privilege can be extraordinarily damaging to an organization in terms of dollars and trust. Conversely, there are times when you want certain discussions or documents to be discoverable, because they may be helpful to your defense.


Finally, the good news. Even a crisis is subject to the normal story arc of a news cycle. The crisis, if managed properly, will not drag on forever. Other stories will attract the attention of the media and the public. People will tire of a story, reporters move on to the next big thing, the next scandal, sexual misconduct, celebrity gossip, international world event or some other organization's crisis. How you handled the crisis, while at a fever pitch will determine how your organization fares subsequently in terms of financial viability and reputational damage.

About the Author

Rafael M. Villalobos, Jr., has dedicated his career to the representation of hospitals, health systems, physicians, and other health care providers. He focuses his practice in the areas of health law, medical staff issues, employer consulting, governance, internal investigations, physician misconduct and transactions on behalf of hospitals, health care systems, and physician groups, and has experience in handling medical and dental professional liability cases as well. Prior to joining Eckert Seamans, for over a decade, Rafael was the Chief Legal Counsel, Senior Vice President, and Director of Insurance and Claims for Aria Health System.

[Image courtesy: Pixabay/ geralt]


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