This presentation by Partner Julie Davis of James E. Arnold & Associates, LPA outlines crisis management and protecting your reputation. The presentation was originally shared at The Ohio Society of CPAs 2017 Columbus Accounting Show. http://arnlaw.com

1. © 2017
Julie Davis
614-410-0032
jdavis@arnlaw.com
115 W. Main Street, Ste 400
Columbus, Ohio 43215

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1. Learn how to develop excellent decision making skills and manage a
crisis action plan.
2. Find out the importance of guiding credible communications with
stakeholders.
3. Understand how to prevent crises when you suspect problems or
vulnerabilities.
Today’s Mission
“After all, crises can be fertile opportunities for learning and change….”
- Managing Crisis: Risk Management and Crisis Response Planning,
http://strengtheningnonprofits.org/resources/guidebooks/Managing_Crisis.pdf

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Three elements are common to most definitions
of crisis:
• A threat to the organization – a significant
negative event
• The element of surprise – not routine
Elements of a Crisis
• A short decision time – not routine management
procedures

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Crisis Typology
Internal
Issue that rises to crisis status and
originates from within the organization
• Major harm from
products/malfunction/error/service/
management
• Financial misconduct or misappropriation
• Employee misconduct – alleged or
confirmed
• Workforce unrest or work stoppage
• Massive IT infrastructure failure
• Major shortage or critical supply
• Facility failure
• Major regulatory sanctions
External
Issue that rises to crisis status and
originates from outside the organization
• Fire - COOP
• Natural or manmade disaster- COOP
• Violent perpetrator (gunman, hostage)
• Malevolent accuser
• External investigation by govt./reg.
agency/watchdog group/media
• Chemical/biological/other
terrorism - COOP
• Massive utility failure (electric,
gas, etc.) - COOP
• Epidemic/pandemic - COOP
• Mass casualty incident – COOP
• Cyber attacks

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OBJECTIVES: COOP planning is an effort to assure that the
capability exists to continue essential agency functions across a wide
range of potential emergencies. The objectives of a COOP plan
include:
a. Ensuring the continuous performance of an agency’s
essential functions/operations during an emergency;
b. Protecting essential facilities, equipment, records, and
other assets;
c. Reducing or mitigating disruptions to operations;
d. Reducing loss of life, minimizing damage and losses;
and,
e. Achieving a timely and orderly recovery from an
emergency and resumption of full service to
customers.
Continuity of Operations - COOP

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PLANNING CONSIDERATIONS: In accordance with current
guidance, a viable COOP capability:
• Must be maintained at a high level of readiness;
• Must be capable of implementation both with and
without warning;
• Must be operational no later than 12 hours after
activation;
• Must maintain sustained operations for up to 30
days; and,
• Should take maximum advantage of existing agency
field infrastructures.
Agencies should develop and maintain their COOP capabilities
using a multi-year strategy and program management plan. The
plan should outline the process the agency will follow to
designate essential functions and resources, define short and
long-term COOP goals and objectives, forecast budgetary
requirements, anticipate and address issues and potential
obstacles, and establish planning milestones.

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Excellent decision making skills in a crisis
First Actions: Start with The Who
• Immediately notify them and begin crunching
• Decide what is and could be at stake
• Decide who must be involved – Board, Officers, Executives,
Counsel, Experts, Disciplines, Stakeholders
• Decide how they are involved – the tiers of decision, work,
approval, information only
• Decide if and what initial
communications can or should be
made, internal and external
Involve your most excellent decision makers*
* If you don’t have any/enough, go find them!

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“Nothing in the world causes so much misery
as uncertainty.”
-Martin Luther

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“People would rather have bad news now than
wait three weeks for good news.”
-Julie Davis

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First Actions: Immediate Internal Actions/Communications
• Data preservation
• Avoidance/understanding of internal/external
digital communications
• Limitation and direction to identified spokesperson
• Hot line for internal suggestions
• Method(s) of delivering internal communications
• Determine need for immediate external
communication
Excellent decision
making skills in a crisis

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Data preservation and analysis
Scope
Depth
Expense
ACPO Good Practice Guide for Computer Based Electronic
Evidence and Forensic Regulator Guidelines
Principle 1: No action taken by law enforcement agencies or
their agents should change data held on a computer or
storage media which may subsequently be relied upon in
court.
Principle 2: In circumstances where a person finds it
necessary to access original data held on a computer or on
storage media, that person must be competent to do so and
be able to give evidence explaining the relevance and the
implications of their actions.
Best Practices

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• The deciders
• The project managers
• The information gatherers
• The communicators/
reputation protectors/social
media managers
• The subject matter experts
(internal and external)
• The lawyer(s)
Excellent decision making skills in a crisis
First Actions: Assemble the Full Crisis Reaction Team

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• What other decisions have to be
made
• Issue identification/sphere
identification
• Information gathering and
analysis of your crisis and how
others have managed
same/similar crises
• Strategic analysis
• Actions to be taken
• Resources needed for decision-
making or actions
• How the War Room and
communication network will
work and be managed
Excellent decision making skills in a crisis
First Actions: Move to The What

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• Follow your First Principles, your mission, vision and values
that drive maximum impact
• How will you best preserve your reputation, and your
reputation for what?
• Test all decisions in this framework
• Test all decisions and communications for coherence
Excellent decision making skills in a crisis
First Actions: Channel The Why
“More than 65% of manager respondents said it was a
significant challenge to bring day to day decisions in line
with their organizations overall strategy.”
-Harvard Business Review, The Cure for the Not-for-Profit Crisis,
October 11, 2011

16. “No plan survives contact with the enemy.”
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-19th Century. Helmuth von Moltke

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• The decision makers may have to change,
depending on who is implicated
• The commercial or political landscape may
require changes
Manage a crisis action plan
If you have a plan:
Use it, but know you will be adjusting it
If it doesn’t work with your crisis, discard

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Manage a crisis action plan
Manage to expedite all actions with all deliberate
speed and efficiency
Investigation and information gathering
• Internal or third party investigation
• Transparent or privileged investigation
• Involvement of stakeholders or
influencers or hostile parties in
investigation

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Making decisions based on phases and outcome of investigation
• Project Management and what is effective process for you can drive
decision making
• These will be iterative, you will have interim communication and
other decisions before most is known
• Examine and consider short-term and long-term impacts
• Constantly examine and test each conclusion you believe true
o What if you are wrong or do not have the whole picture?
o What if new facts or acts are revealed?
o What if new events occur – good or bad?
o What assumptions, motivations, biases and logic issues are involved?
o Are these decisions consistent with our mission and values?
o Are these decisions consistent with our legal obligations?
• Don’t make decisions beforetime – hard but smart to get right
• Be fluid and flexible, to change, reassess or intervene when change occurs
Manage a crisis action plan

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Guiding credible communications with stakeholders
Outgoing communications
• Establish the message(s)
o Early – express concern, describe plan to obtain facts, emphasize
your reputation and values
o Middle – possible updates on status of investigation, issues,
decisions, explanations, emotions, commitment to values and
social impact
o Later – comprehensive decisions and direction and positions
• Establish the channels for most effective direct communication
• Understand and use indirect channels as feasible
• Control and manage social media messaging using all affordable data
management techniques
• Understand and test if your message is being heard
• Analyze and understand reaction to your message

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Guiding credible communications with stakeholders
Incoming communications
• Plan how incoming messages are received,
assessed, and delivered to decision makers
• Plan how sources of communications are
prioritized for response if any
• Prepare for a conversation, and manage that
conversation in the most appropriate channels
• Loop reaction to incoming messages through your
communications strategy

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How some crises can be prevented
Reasons why we don’t avoid “Predictable Surprises”*
• Our desire to maximize short term returns
• We discount the future – ignore looming problems, underinvest,
underprepare or prevent
• We indulge positive illusions v. sustainable reality
• We have ego-centric, biased blind spots of what is real or fair
* Predicable Surprises: The Disasters You Should Have Seen Coming, Watkins
and Bazerman, Harvard Business Review, April 2003

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Making Lemonade
• Positive coverage and reputational boost if crisis is managed
well
• Relationships with stakeholders and consumers can be
strengthened
• Internal relationships can be strengthened
• Strategic learning and change
o You identify your excellent decision makers!
o You address structural and human gaps or build
improvements
o You can strengthen alignment
with mission and values
o If needed, you can fix your
mission and values