How to Navigate an Existential Crisis
Discussion Summary & Key Takeaways
Here's What You May Have Missed:
Our May 17 program, entitled How to Navigate an Existential Crisis, tackled the real-world scenario of how the board should act and react in the face of an event that may be materially damaging to the corporation, both to its reputation and otherwise. The panel—consisting of crisis PR expert Kent Jarrell of APCO Worldwide, Marilyn Wasser, Executive VP and General Counsel of Realogy Holdings Corp., and Vada Manager, a global business executive who is both Senior Counselor at APCO and a member of the Valvoline Inc. board of directors—began by citing recent crisis situations that illustrate why board acumen in handling a crisis is vital in an environment in which a company’s reputation can fall apart in a matter of hours, given the rapidity of the news cycle and social media.
In setting up the case study, the panel offered the following guidance to boards when a problem starts to emerge:
- Don’t assume the facts or that the initial allegation is the entire story
- Consider whether there may be conflicts of interest among board members and with respect to advisors who may have close connections with management
- Have a readiness plan that includes stand-by independent advisors and designates the spokesperson
- Ensure that only one person speaks for the board
- Conduct scenario exercises with your board to get the directors thinking about how to react to an emerging threat before it becomes material; both the board and management should understand the threshold at which the board is to be advised and becomes involved
- Have an understanding beforehand of how your company’s brand and reputation are perceived—if these are positive they may ameliorate the negative fallout from a potentially damaging allegation or incident; take advantage of any sources of data to help assess your company’s reputation externally
- Understand emerging issues and risks before they become material events
- Interact with investors regularly; don’t let the first interaction occur after the crisis hits; listen to what concerns that investors may have before those issues boil over
- Be informed as to employee concerns; hotline and other complaint activity may signal problems before they become a crisis
- Look at the composition of your board and consider whether in your industry it is appropriate to add crisis management experience to your board’s skills set; evaluate your board composition to ensure directors will continue to be perceived as independent of management (in particular during a crisis involving management or other situation where management has a conflict of interest), including an evaluation of the impact of tenure of director service
- Know who is the fallback person if the Chair is conflicted, such as an independent lead director or the chair of the audit committee
- Know if there is an appropriate committee to take the lead, such as audit or risk, or if a special committee should be formed
- When in doubt, management should communicate with the board about an emerging threat
- Identify key stakeholders such as investors, customers and regulators and the appropriate messages. Remember that both the board as a whole and you as an individual director have reputations and will be judged: did you meet your fiduciary duties; did you under or over-react?
The panel then tackled a hypothetical scenario positing allegations of sexual misconduct against a Chairman/CEO and, with the audience, developed how the board would respond as the situation escalated. Among the topics discussed:
- The need to embark on fact-finding including retention of independent advisors
- The need to avoid making assumptions about the facts and scope of the issue; as facts develop in the investigation, modify scope of investigation if the facts so warrant (e.g., facts may indicate a problem that goes more deeply into the organization than just the CEO)
- When public disclosure must be made
- Should the board make a pre-emptive statement to get out in front of news coverage?
- What manner of public statement should be made and when to assure the various constituencies of the continued health the company’s business
- Early disclosures should focus on the process that the board is utilizing
- Is there a need to make a management transition, such as a temporary leave, and to start thinking about a more permanent change?
- The particularly thorny issue of dealing with a founder who is the accused
- At what point is there enough information to take action, such as settlement; while nothing stays confidential for long in the current environment, that does not mean that the board should act “with a gun to its head”
- If there are senior management departures, involve directors who are more independent of the management team and make the transition as clean as possible
- Avoid creating the “next day” headline for the company (e.g., don’t compound the problem with inappropriate severance arrangements with departed management)
The presentation materials are available as a pdf in the "Documents" section below.
Executive Director and Global Crisis
& Litigation Communication Practice Lead
Kent Jarrell is global crisis management and litigation communications practice lead of APCO Worldwide, a DC-based global communications consultancy with over 650 employees, and a certified Women’s Business Enterprise. Kent assists CEOs, general counsels, other executives and boards of directors on the preparation for unfolding material events. He has been a trusted counselor on numerous cases in North America, Europe, Australia and Africa, with assignments that include: advisor to Hewlett-Packard’s board of directors during the resignation of the company’s CEO in 2010; litigation and crisis advisor for Johnson & Johnson; outside global manager for Merck’s communication efforts on the Vioxx litigation; and spokesman and communications advisor for the Hershey Trust board of directors.
Kent has served as a media spokesman in several cases and also handled negotiations for several clients with television investigative shows including “60 Minutes”, “Frontline”, and “Dateline.” As a broadcast journalist for more than 20 years, Kent reported from 41 states and 13 countries, covered five U.S. presidents and reported on numerous crises, including the nuclear accident at Three Mile Island and the crash of TWA Flight 800. He also produced radio documentaries for the British Broadcasting Corporation in the UK.
Kent is the lead author of Effectively Managing the Social Media Invasion of the Legal System in the 2016 winter edition of the In House Defense Quarterly published by the Defense Research Institute. He also authored Litigation Communication: A Road Map to an Emerging Art published by the National Legal Center. He provides commentary and analysis for international and national news organizations. He has been recognized by PRWeek as Crisis Communicator of the Year.
Vada O. Manager
Manager Global Holdings LLC
and Senior Counsellor
Vada O. Manager isfounder and CEO of Manager Global Consulting Group LLC and Senior Counsellor, APCO Worldwide. Before, founding Manager Global Consulting Group, Vadaserved as Senior Director of Global Issues Management for NIKE, Inc. with direct and indirect management responsibilities for NIKE’s global sourcing procedures, brand/marketing communications support for NIKE's subsidiaries, litigation support and athlete/product/corporate crisis management.
Before joining NIKE in 1997, Vada held a similarexecutive role at Levi Strauss & Co.'s Global Headquarters in San Francisco. Vada also served as a Vice President of the Washington, D.C. based consultancy – Powell Tate (now PT Weber Shandwick). His past professional affiliations and/or institutional clients include: former Secretary of the Interior and Arizona Governor Bruce Babbitt, Governor Rose Mofford, Mayor Sharon Pratt Kelly (Washington, D.C.); Major League Baseball and the PGA Tour. He also served as Vice President of Public Finance for Young Smith & Peacock, a NYSE registered brokerage and investment banking firm (now Wedbush Securities).
Vada serves as a corporate director for Valvoline Inc. He also serves as a director for the Helios Education Foundation (postsecondary education with operations in Arizona/Florida), Genesis City (AZ); and, the Mannie Jackson Center/Humanities (IL). In both 2016 & 2017, Mr. Manager was named by Savoy Magazine to its “Power 300 - Most Influential Black Corporate Directors” and received the AZ Informant’s Community Newsmaker Award. A frequent presenter on business strategy, he has appeared on CNN, ESPN, ABC's Nightline, NBC’s "Today Show” and other media outlets.
Marilyn J. Wasser
Executive Vice President and General Counsel
Realogy Holdings Corp.
Marilyn J. Wasser has been executive vice president, general counsel and corporate secretary of Realogy Holdings Corp. since May 2007. In her role, she provides strategic legal direction and support for Realogy, its Board and its business units and brand networks. As general counsel, she is responsible for Realogy’s legal efforts in the areas of governance, litigation, compliance, regulatory affairs, human capital, benefits, corporate, mergers and acquisitions and securities, as well as franchise and brokerage obligations. She also supports the Company’s government relations function.
Before joining Realogy, Marilyn spent 24 years in the telecommunications industry. She spent two years as executive vice president, general counsel and corporate secretary for Telcordia Technologies (now Ericsson), a leading global provider of telecommunications software and services.
Prior to her post at Telcordia, Marilyn spent 22 years with AT&T Corporation and AT&T Wireless Services, where she held positions of increasing responsibility, up through as executive vice president, associate general counsel and corporate secretary for AT&T Wireless Services. She was a member of both the AT&T and AT&T Wireless Senior Leadership Teams, as well as the Wireless Strategy and Business Development Council. As such, she provided legal direction for corporate, governance, securities, business development, and board matters.
Marilyn played an integral part in most of the merger and acquisition activity during her tenure as an executive at AT&T and AT&T Wireless, including numerous large-scale wireless acquisitions, multiple major cable acquisitions and divestitures, and the IPOs for both AT&T Wireless and Lucent Corp.
7:30 a.m. - 8:00 a.m. Networking & Breakfast
8:00 a.m. - 9:30 a.m. Program and Q&A
Location and Time
Canoe Brook Country Club
1108 Morris Turnpike
Summit, NJ 07901