What to do when the C-suite misbehaves

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CFO stealing funds? CEO bullying? COO awarding himself contracts? CMO posting inappropriately on social media?

When it’s the C-suite, it’s not easy to know how to deal with the issue and in small organisations it’s often left to the Chair, Board members and a lawyer to sort out the mess.

While the matter may be best be solved with a quick and quiet executive exit from the business, all too often stories like this leak. Managing the communications is critical to ensuring that gossip doesn’t undermine your business’s reputation, let alone media coverage doing more damage.

So, as you ring the lawyer, consider your communications options at the same time.

Option 1: Head in the sand and say nothing

This is a strategy many lawyers love and adore. ‘No comment’ is an old fashioned go-to for politicians and business people who have found themselves knee-deep in trouble. In the modern world of rapid communication and interconnectedness this approach is barely valid, and only if you are absolutely sure no details of a situation will leak, which is generally impossible to control. In our six-degrees of separation society, it only takes someone to re-tell a story in “total confidence”, before it’s swept across the city’s business circles. And in the re-telling the story will transform into something barely recognisable with the ability to damage organisation, Board and senior executive reputations.

Saying nothing is only really achievable if you don’t have a team, customers, shareholders or stakeholders - and the media haven’t started calling. It’s a rare business that doesn’t have any of these.

It’s also unrealistic if police or regulators are involved, or about to be.

Keeping silent will be very frustrating for your team (who will be confused, outraged or offended if they are not clear what is happening at the top). It leads to cultural problems which are difficult to fix, particularly if the problem lies in your leadership team.

Whatever happens, if you choose not to share information, ensure you really trust those involved or people sign Non-Disclosure Agreements.

Option 2: Share ‘some’ of the story

As openly, quickly as possible, and subject to legal constraints,  confirm or provide relevant elements of the story with those who are directly affected. Keep the details succinct and focus on the future rather than the past. In particular, emphasise that decisive action has been taken to demonstrate that the Board and other executives are protecting the reputation of the organisation. This is an adequate strategy but requires careful management if, and when, there are ongoing investigations or legal actions. So legal advice will be an important input, but it should not dictate every element of your communications.

Option 3: Be transparent

If you’ve made the assessment that your issue is likely to be of interest to the media, be proactive and be prepared. You may know that you will be forced to make information public because there will need to be a regulatory disclosure or a third party will announce an investigation. Don’t hedge your bets. Take advice. If it matches your instinct then get ahead of the game. Brief your team, customers and shareholders in advance. Prepare a spokesperson and give them the support to comment when necessary.

Build a set of communications tools that can be adapted quickly and updated when needed. You can use video to effectively control the message, particularly if the issue is starting to become a crisis of confidence in the media, particularly if your CEO is involved.

Pre-brief media strategically if possible so you can control when the story breaks and influence the coverage.

Look at your marketing and advertising and adapt it if the issue affects your reputation. You don’t want to be advertising ‘your secure and trusted financial products’ if someone has just stolen company funds.

Finally, ensure that you’ve got an open communications channel with employees and stakeholders. Ultimately, you want to hear what they are hearing. Don’t tune out to the gossip as you need to move fast to correct facts when relevant.

By thinking about communications early in a C-suite crisis, you will stay in control and have a better chance of redeeming your reputation quickly after the crisis quells.

And by the way, those scenarios at the start happened in Perth in 2018.

If you need assistance with crisis communications and issues management, or would like training in these areas, contact Anthony Hasluck