Leaders of the Alpha Advisory Group, which includes its subsidiary Alpha IR Group, recently presented a webinar to the National Association of Corporate Directors (NACD) on the important role that corporate boards can play in ensuring their organizations are prepared to activate a crisis plan. A key theme centered on mitigating financial harm and protecting reputation with the right processes, teams, and tools for a fast and seamless response when a crisis does occur.

To understand the current state of corporate crisis planning, there are some meaningful statistics to consider:

  • 49% of companies have a formal crisis communications plan, 28% have an informal plan, and 23% don’t have a plan (or aren’t sure if they do).
  • 69% of businesses have experienced a crisis in the last five years, yet 29% of companies have no staff dedicated to crisis preparedness.
  • 56% of corporate board members say they should have a role in reviewing and understanding a company’s overall crisis plan.
  • 30% of corporate board members whose companies have experienced a major crisis say that it took ~1 year to rebuild their reputations, but 16% said it took 4+ years.

*See sources at end of document

With these facts in mind, the Alpha Team developed the NACD session to include the types of issues and challenges organizations may face as well as key insights and best practices gleaned from our many years of experience. Highlights include:

Organizational Barriers: Boards should understand there could be organizational barriers to overcome tied to internal ownership of crisis planning and the bandwidth it takes to manage and update crisis plans. Board support can go a long way to ensure there are resources dedicated to this effort.

    • Elements of an Effective Crisis Plan: An early measure of success is fast activation of a crisis plan and communications to key stakeholders within the first 24 hours of a crisis. To set companies up for success, the most effective crisis plans have the following elements:
    • An issues audit and assessment process to understand the potential issues and significant threats early on.
    • Formal tracking and monitoring of issues to prepare for a response as issues escalate.
    • Multi-level response teams, which include various levels of decision makers based on the magnitude of the potential impact.
    • Clear operating principles and a well-trained response team with clear functional roles and action items.
    • Implementation tools such as checklists of functional actions items, audience channels, standby statements, and communications deployment protocols.

    • Board Involvement in Crisis Preparedness: Boards can play an important role in ensuring crisis preparedness by asking the right questions to their leadership teams:

    • Have we identified and evaluated our risks and top threats, and is there a process to monitor the risks on a regular basis?
    • Do we have an updated crisis plan with a clear owner?
    • Is there a defined response team with the right resources in place?
    • Has the response team been trained and do they have the skills to manage a crisis?
    • Will we have the ability to respond quickly when a crisis arises?
    • Does your organization have an outside advisor for additional support?

    • Full-Scope Crisis Planning, The Alpha Way

    We understand that every company has risks that could become a crisis, and that a fast and seamless response is critical to maintain your reputation and protect your brand. But companies that have undergone significant change, or are small-to-midsized, may have an outdated plan or no plan at all. Our flexible crisis planning approach starts from a single foundational model that can be quickly and strategically customized for your business. Additional information can be found at www.alphaADVgroup.com.

     

    About Alpha Advisory Group

    Alpha Advisory Group, which includes its subsidiary Alpha IR Group (collectively “Alpha”), is a premiere C-Suite Advisory firm that brings deep sector expertise and senior-driven programs focused on clients’ most critical stakeholders. The firm’s work includes strategic investor relations consulting, corporate communications and reputation advisory, as well as transactions and special situations counsel. Alpha is the right choice to manage clients’ reputations, credibility, and ultimately, their corporate and investment brands. Alpha is headquartered in Chicago, with offices in New York, Boston, and Dallas. Alpha serves clients across all industries and through multiple inflection points in the business cycle. Additional information can be found at www.alphaADVgroup.com.

     

    Sources