CommsCon: ‘There’s no textbook for handling a crisis.’ What to do when the boss is compromised by a scandal
Cato & Clive Partners are fans of the old boxing adage: “Everybody has a plan until they get punched in the face.”
As crisis communications experts, Sue Cato and Clive Mathieson know all too well the need for a solid, punch-proof crisis plan.
The pair took the stage on Wednesday morning at Mumbrella CommsCon in Sydney, where they presented a hypothetical scenario that had the well-worn beats of a situation they’d helped mop up numerous times before.
There’s an ASX200 company, a well-known consumer brand, whose CEO has been racking up hundreds of thousands of dollars in lavish lifestyle expenses and charging them to the company. Yacht, champagne, expensive jewellery for women who aren’t his wife – you know the drill.
A whistleblower has contacted the journalist — in this hypothetical, the very-real Sam Buckingham-Jones, who joined the two on the panel this morning — and there is an irrefutable paper trail of the misdeeds. This is SBJ after all, he’s done his work. He contacts the company’s communications team at 9am with about 20 well-placed and detailed questions, and a three-hour window in which to respond. The story is going live at noon.
“There’s no textbook for handling a crisis,” Mathieson explained, “everyone is unique.”
Although history doesn’t repeat, it rhymes. Especially if the scandal involves the CEO.
“When it compromises the take person, which is often the case,” Mathieson said, “suddenly you’ve taken out the person who makes all the decision”
First thing: ring the CEO who will admit and explain – and attempt to justify his action.
“You’re in a pretty grey area here,” Mathieson reminded.
After the CEO, it’s time to gather your leaders.
“Tell them we’ve got an issue, tell them to get a war room together”, Cato said, “then, work out who gets to tell the chairman.”
External voices are needed here, as cooler heads will offer sage advice when those on the inside are ducking and weaving and avoiding being punched in the face.
“You do need external legal advice, crisis advice, and maybe cyber crime advice,” Cato said.
The biggest error you can make, Cato warns, is to not have your facts straight.
“One of the mistakes [companies in crisis] make is jumping to a conclusion and making a definitive statement.”
Such premature strikes can be fatal. Cato suggest finding out who else is embroiled in the scandal: who signed off on the costs, who participated in the spending. You should be setting up media monitoring — don’t assume SBJ is the only one with the scoop — and with the market opening at 10, you need to go into a trading halt.
“The fact that we’ve got a CEO who thinks it’s okay to spend hundreds and thousands of dollars,” Cato said – “there’s only one way this will end”
Although it is an emergency, Cato recommends “cold, rational thinking” and to step out how the scenario will likely end.
Another fatal flaw is to magnify the importance of the media in comparison to your employees, shareholders, board, and other more important stakeholders. And don’t rush a response in order to appease the journalist.
“If you get your employee relations wrong, if you get your ASX messaging wrong, the media will keep feeding on it,” Cato warned.
“There has to be one message from the company. We can’t be telling different people different things.
“If you jump to conclusions and say things that — maybe, in your heart of hearts, you believe to be true — and it turns out to not be true – you look like you don’t know what’s going on, that you’re being misleading, being dishonest.
“Once you’ve lost that trust with your key shareholder group, you’ll never get it back.”
So, what to do, while the journalist is getting colour, contacting employees, “knowing full well this will get back to the decision makers,” as Buckingham-Jones noted. “There’s a reason I didn’t do this a week ago.”
It makes it feel like an emergency – but the worst thing you can do is rush out a response in the hope it will suffice, and have your key stakeholders finding out through the media.
Cato advised precaution before making your first public move.
“Don’t fill that space with spin.”
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Nathan Jolly is the Deputy Editor of Mumbrella. He joined the team in July, 2023.
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