Fiduciary responsibility to shareholders has long been understood as the domain of corporate board members. And corporate and brand management has been thought to be the domain of marketers and communications professionals.
Those neatly drawn boxes on corporate org charts are not so neatly divided anymore. When the reputation of a brand suffers, so does its stock price. As Warren Buffett describes it, “it takes 20 years to build a reputation and five minutes to ruin it."
A brand can take a beating faster and falsely now thanks to rapid-speed communications and how “news” is formulated. So crisis preparedness becomes the concern of both senior management and the board of directors. While management teams have for a long time employed varying degrees of crisis preparedness protocols and exercises, boards of directors are seldom organized to know where their risk lies and what to do about it if threatened.
It starts with knowing where you are at risk. Conduct an audit, thoroughly, to pinpoint the weak spots or where you may find vulnerabilities. Even the slightest risk should be taken into consideration – remember Achilles' heel?
Next, develop an understanding of how corporate leadership is prepared to respond to risks and assess the adequacy of their crisis and contingency plans. Board members are expected to attest to the reliability of the representations of the management team and therefore bear some level of personal responsibility in this area as well.
Preparedness may point to the board hiring independent communications counsel to assess risk. Corporate and boards' legal counsel possess important facts and judgments regarding compliance with items such as securities rules – one of many considerations when it comes to brand management.
One thing is for sure: when rumors swirl or crisis hits – the speed of press and the multiplier effect of the web make it nearly impossible to make the most prudent judgments in the heat of the moment. Preparedness now matters, maybe now more than ever, in the boardroom, too.
Justine Griffin is SVP and head of the crisis communications and reputation management practice at Rasky Baerlein Strategic Communications.