A major corporate crisis can happen at any time.
It’s 9 o’clock on Monday morning and you’re greeted by a swarm of reporters standing outside your office door, demanding answers. Inside, a crisis is brewing that no one is equipped to handle; within hours, it spins out of control.
Let’s face it, a major corporate crisis can happen at any time. Whether it’s employee misconduct, a hostile takeover or an environmental disaster, companies are often plagued by issues that wreak havoc with their corporate reputation and have a negative effect on their bottom line.
Having a well-thought-out public relations strategy can help a firm handle such a crisis, communicate its message to stakeholders and duly emerge with limited damage and sometimes even an enhanced reputation.
And one of the people who can help drive a successful PR strategy is the general counsel.
‘Showing that you are adding value to other functions of the company is one of the critical roles of a good legal department,’ says Christopher Reynolds, group vice president, general counsel and secretary for legal services at Toyota Motor Sales (TMS). ‘The general counsel or corporate secretary should have a well-nourished relationship with the PR group.’
Reaching a large audience with the right message during or after a crisis can be challenging for companies. But Reynolds points out that a well-versed PR strategist should involve the legal function to avoid issuing a message that carries risks- for instance, by contradicting the company’s overall mission.
‘A representative from the legal function can point out a securities issue and review the PR strategy when necessary, particularly when you are dealing with products that are highly regulated,’ adds Reynolds (pictured left).
Often, when companies are unprepared and are caught in a crisis, they resort to providing inaccurate information just to protect their image. But this can easily cause more harm than good. Take Massey Energy, which was cited for more than 1,300 safety violations in the years leading up to its deadly explosion (the Upper Big Branch Mine disaster in 2010). A report issued earlier this year blames the mining giant, which it says ‘knowingly violated the law’ and ‘blatantly disregarded known safety practices’ the Richmond, VA-based company lost control of the incident and allowed the situation to escalate, resulting in a series of federal investigations that eventually led to the sale of the company.
Another example of a poorly handled incident is the BP oil disaster.
Reportedly, the company’s chief executive was quoted as saying the accidental oil spill was ‘very modest’; in fact, it caused catastrophic and permanent ecological damage.
‘PR strategies need to be accurate, truthful and consistent so your customers and employees can feel comfortable relying on your products,’ notes Reynolds, who is also the corporate secretary and chief environmental officer at TMS. ‘PR strategies built around falsehood have a weakness at their core so they tend not to resonate as well.'
Reynolds advises general counsel and corporate secretaries to get actively involved in formulating a PR plan. And they should consider the following:
1) Make a pitch: As the company’s lawyer, when you go in you should have a track record of being a facilitator rather than an obstructor. Remember, your job is to say ‘yes’ in a smart way that protects the company. Provide alternatives if one suggestion does not seem fruitful.
2) Allow the PR group to do its job: General counsel with a litigation background are pretty confident in communicating in a cogent way and, as lawyers, they tend to pride themselves on being good wordsmiths. The problem is that their skills are geared for legal purposes and don’t always translate well to the PR arena. There are people with a unique skill required for responding to old or new media: they’re called PR professionals.
3) Spotting risk: Scrutinize the message to make sure there are no risks associated with what is being conveyed to the public. If you push the message that ‘we fired an executive’ that can create the risk of employment litigation. Better to provide a simple, clear and safe message.
If implemented well, a successful PR strategy can help pull a company out of a major crisis and can even increase the credibility and vitality of a firm’s reputation, online and offline. General counsel should have a clear role in this area; after all, no company wants to be burned by bad news.
