Crisis management is the process an organization takes to deal with sudden, unexpected, disruptive and/or significant negative events that threaten to harm the organization or its stakeholders (each a “Negative Event”). This practice area is very broad. We have identified a three-step process that we recommend be undertaken to prevent the occurrence of or to limit or remedy harm from Negative Events. The first step is to identify or discover the Negative Event, the second step is to determine the cause of the Negative Event, and the third step is to take measures to prevent the occurrence of or to limit or remedy harm from the Negative Event.
Step 1 (Identification) and Step 2 (Cause): There are a large number of cases where problems, actual or potential, are known within the organization but are left unaddressed and allowed to become Negative Events. Sometimes this occurs because personnel in the organization are unaware of the problem in the first place; this is a failure to identify a problem. In other cases, it is due to a lack of understanding within the organization as to what constitutes a problem that could lead to a Negative Event or how to move it to the next level to address the problem before it becomes a Negative Event. In this manner, a correctable problem is allowed to grow and develop into a Negative Event; this is a failure to understand what can cause a problem to become a Negative Event. For this reason, organizations need to implement internal compliance systems to help the organization to identify problems before they become Negative Events (Step 1) and to implement rules and regulations to inform all employees on what to do if they become aware of any such problems (Step 2). Organizations today are usually aware that they need to conduct internal investigations to identify problems and potential causes that may develop into a Negative Event. However, internal investigations conducted by an organization itself come with their own limitations, e.g., the personnel conducting the investigation may not know what to look for or be inclined to disregard certain types of problems that could lead to the occurrence of a Negative Event. For example, we see a great many cases where organizations are too eager in their pursuit of profits to sufficiently address compliance issues. It is necessary to pay attention not only to superficial causes, but you also need to address any latent causes, such as the blind pursuit of immediate profits.
As a first step, we recommend that an organization’s compliance system be checked by an objective third party with experience in dealing with Negative Events. As a preventive measure, we are able to (i) carry out investigations for our clients to help them identify problems areas, (ii) introduce awareness programs with the employees of the client through training and other measures, (iii) conduct comprehensive reviews of the internal rules and regulations, etc. of our clients to help them to control how their personnel will react to a problem, (iv) propose refinements to the internal control systems of the client to help keep their systems current, and (v) provide advice on emergency preparedness by creating response manuals to help the personnel of the organization navigate the critical moments after the occurrence of a Negative Event.
Step 3 (Remediation): It is essential that the organization, from top to bottom, realize that everyone must come together to help the organization overcome any negative effects that may arise from the occurrence of a Negative Event. If a group in the organization is allowed to put a pet project, e.g., the pursuit of immediate profits, over the health of the organization, it may eventually cause substantial damage to the organization. Therefore, it is important to build a system to check and monitor the behavior of the organization as a whole.
Upon the occurrence of a Negative Event, we have extensive experience in being called in by our clients to become actively involved in the investigation of the cause of the Negative Event, to help draft measures to prevent a recurrence and to help resolve issues our clients may have with how they should handle customer-relations and other aspects that may arise in relation to the Negative Event. We have considerable experience in helping our clients (i) to form external investigation committees (i.e., “third-party committees”) for organizations, including listed companies, that include experts in various fields from our broad network, both from within and outside our firm, to carry out detailed, independent investigations; (ii) to handle large-scale investigation cases that require the commitment of a large number of personnel; (iii) to appoint us as external whistleblowers for organizations, and (iv) to provide advice on a number of issues that arise in the course of the day-to-day operations of our clients in relation to crisis management issues.