Fortunately, major breakdowns in corporate governance aren’t an everyday occurrence (we say this, even though we once had Robert Maxwell as a client!). But they do occur with sufficient frequency (think Tycho, and Enron, for three) that company advisors need to have an emergency plan of campaign ready to go if the worst happens – whether the event happens to them, a competitor in the sector or a corporate entity of sufficient profile that wider business confidence may be affected.
One recent international story gives a salutary lesson. Satyam Computer Services is a leading global business and information technology company, delivering consulting, systems integration, and outsourcing solutions to clients in over 20 industries. The company is headquartered in India. Last January its founder and Chairman, Ramalinga Raju, was arrested after it emerged there was a black hole in the Company’s accounts. The shares collapsed, and the business has subsequently been sold.
All business continuity teams and their advisors, internal or external, should study the story to see if their planning is up to date and fully provides cover for this kind of experience.
The first decision to make is: do you stay silent, watch from a distance and see what happens, or do you take pre-emptive action from the get-go? Our view is the latter: Strike first, but strike intelligently and thoughtfully.
There are some questions to ask at the outset. What are our clients and suppliers saying? What’s the collateral damage? What’s our attitude to cultural variations in business ethics? How do we establish good corporate governance credentials in a young marketplace? And, frankly, for any large-scale business anywhere, and their advisors – what if it were us?
As we see it, the first focus should be on a twin set of actions: pulling in information from internal and external stakeholders, and formulating a co-ordinated set of communications to be pushed back out to those stakeholders to demonstrate that the issue is being actively managed. And co-ordinated is the key here. Internally, people need to hear a single set of messages. Externally, the same is true (eg don’t forget your website – is there what is now an exaggerated and embarrassing ‘vision statement’ from the Chairman sitting there somewhere?).
This holds true whether you’re a player in the turmoil, or watching interestedly from the sidelines. Be ready to be asked – have your responses prepared.
Key stakeholders to be consulted include the investment community, key clients, key suppliers, government and regulators, the media and staff. Information gathering would include: what are the various stakeholder classes thinking? Are they likely to take immediate action that could be catastrophic for the business? Do they have accurate information? What are their immediate concerns? What are they looking for the business to do in the short term? Is the business perceived as dealing competently and openly with the situation?
This information will provide the building blocks for the construction of a comms plan designed to: limit reputational damage, reassure stakeholders of the business’s integrity, ensure that appropriate action is taken to scour out any areas of potential corporate vulnerability, indicate that the business intends to be open about the issues and co-operate with the appropriate authorities if necessary, and create a firm and consistent headline narrative line on the company’s immediate and future actions.
With the comms objectives in place, the plan will move on to identify the comms tools and channels that are most appropriate: FAQs, face to face targeted briefings, public meetings within the communities affected, the use of electronic comms – webcasting for example and PR activity. Fundamentally, though, most of these will best be utilised further down the line. The more diverse the comms activity, the harder it will be to control – and control is everything, particularly in the early stages.
Of course, this comms plan SHOULD knit with the company’s existing Business Continuity/Emergency plan, which should cover contingency actions for the Highest Impact eventualities. These would include: loss of senior management (in Satyam’s case, resignation of Chairman), loss of investor confidence (the need to secure funding), loss of key client (in this case the World Bank), loss of key supplier etc.
Interestingly, it seems that Satyam did take a number of constructive steps pretty quickly: appointed an interim CEO, set up SWAT teams of senior personnel to assess customer issues, internal competencies and business support, formulate co-ordinated communications, secure funding, and go onto the communications front foot where misreporting was identified.
To be able to report publicly that orders are still coming in, staff are showing commitment and the Board is dealing with the key issues, as Satyam did, shows that it is certainly possible to counter a media onslaught even in the worst of times. The media themselves are tough to manage of course. It’s a long term strategy, and requires its own planning.
In due course, all being well and the business survives, the next stage is to plan a longer term comms campaign targeted at individual stakeholder classes. This will include PR, marketing and be a hearts and minds process to reassure that the sector is sound and the business has addressed its governance and is stronger for it.
Overall, our view is: whether you’re in the eye of the storm or indirectly related, you can’t sit back and hope for the storm to pass over you. Even if you decide to hold fire for a time, there’s a huge amount of stuff you should be doing internally to assess, benchmark, run ‘what if’ scenarios, double and triple check systems, T&Cs, contingency planning. And talk to internal and external advisors, partners and stakeholders. If you’re anywhere near the storm, someone is going to put questions to you. Have your answers ready – and not just that, have your channel mix organised too. Who you’re going to talk to, how and when.
Get planning!
Business enquiries please contact:
Bruce Todd
Communication consultant
0207 605 4500 or 07802 911 232
Bruce Todd
Press enquiries please contact:
Georgina Lipscomb
Propeller Group
0870 066 4608 or 07737 388 414
Georgina Lipscomb
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