http://www.bulletproofblog.com The blog on crisis communications Thu, 02 Sep 2010 19:32:01 +0000 http://wordpress.org/?v=2.8.4 en hourly 1 http://www.bulletproofblog.com/2010/09/02/dodd-frank-act-applies-added-pressure-on-executive-compensation/ http://www.bulletproofblog.com/2010/09/02/dodd-frank-act-applies-added-pressure-on-executive-compensation/#comments Thu, 02 Sep 2010 19:32:01 +0000 Michael Robinson http://www.bulletproofblog.com/?p=3699 Dodd-Frank financial regulatory reform bill that became law on July 21 are likely to provide activist investors with greater leverage in setting executive compensation – further tipping scales away from historical management-led control.

The first is a measure that requires U.S. companies to disclose the ratio between CEO pay and that of their average employee. The second will provide shareholders with a mandatory, non-binding “say on pay” – or an advisory vote on top executives’ pay packages – by the 2011 proxy season.

From a compliance standpoint, neither provision obligates boards of directors to curb the executive pay packages that have generated such controversy over the last several years. From a public perception perspective, however, it’s clear that both measures are designed to make it more difficult for companies who do not – or cannot – align results with performance.

An aide to Senator Robert Menendez, who sponsored the compensation disclosure legislation, has said “The idea behind the new rule is that sunlight is the best disinfectant. Disclosure will help encourage fair pay for workers at a time when middle class pay has stagnated while CEO pay has skyrocketed.” Indeed, the numbers seem to support the aide’s conclusion. According to the executive compensation research firm, Equilar, S&P 500 CEOs earned an average of $7.5 million in 2009 while the average private sector employee brought home just more than $40,000.

These numbers paint a powerful picture – and especially so for the many companies whose executive pay packages lie above the mean.

While many companies have already voluntarily adopted say on pay mechanisms (nearly all are non-binding), simply holding these advisory votes isn’t going to win any points in 2011, as every company will now be obliged to do so. At a time when expanded proxy access means directors will be held to a higher standard of accountability – and executive compensation is a marquee responsibility by which boards will be judged – it’s hard to imagine that boards will be able to turn a deaf ear to investors for much longer.

The challenge ahead for boards of public companies is two-fold.

First, they must clearly define the metrics and performance standards by which investors should judge executives’ value to the company. Have they generated positive shareholder returns? Have they opened new markets or expanded the company’s share in existing ones? Have they driven expansions and acquisitions? If so, articulating how executives have reached each of these performance goals provides boards with the means to squelch activist shareholders and justify investments in leadership.

And second, boards must be prepared to adopt executive pay policies aimed at recouping some of that investment if defined performance benchmarks aren’t met. Be they claw-back mechanisms or pay packages that are even more focused on long-term performance, the boards that implement measures aimed at creating a new level of executive accountability will be the ones best positioned to navigate an era in which they, themselves, are being held to a higher standard as well.

Michael W. Robinson is Senior Vice President and Chair of the Corporate & Public Affairs Practice at Levick Strategic Communications and a contributing author to Bulletproof Blog. Connect with Levick on Twitter: @Levick.

]]> http://www.bulletproofblog.com/2010/09/02/dodd-frank-act-applies-added-pressure-on-executive-compensation/feed/ 0 http://www.bulletproofblog.com/2010/09/02/johnson-johnson-takes-a-cue-from-its-own-playbook/ http://www.bulletproofblog.com/2010/09/02/johnson-johnson-takes-a-cue-from-its-own-playbook/#comments Thu, 02 Sep 2010 15:49:14 +0000 Gene Grabowski http://www.bulletproofblog.com/?p=3695 wrote the modern crisis communications playbook with its response to the Tylenol tampering scare.

Soon after that crisis erupted, the company voluntarily recalled all of their over-the-counter pain medications – not just those in the affected area outside Chicago – at great cost to its bottom line. While J&J and law enforcement worked together on the case, the company communicated often with all its stakeholders to keep them informed of all significant developments. And once the crisis abated, the company created the tamper-resistant packaging that remains the industry standard today.

But when J&J initiated the largest children’s drug recall of all time earlier this year, critics said the company seemed to have forgotten the very lessons it taught 30 years ago. Allegations that the company ignored consumer complaints before finally implementing the recall led House Committee on Oversight and Government Reform Chairman Edolphus Towns to comment that “The information I've seen during the course of our investigation raises questions about the integrity of the company. It paints a picture of a company that is deceptive, dishonest, and has risked the health of many of our children."

Now, however, it seems that J&J is back on track. With the announcement by CEO William Weldon that the company is reorganizing its manufacturing infrastructure and creating a new executive position to oversee quality assurance, J&J has taken decisive action to reform its practices and ensure consumer safety.

The job ahead for J&J will be to ensure that the person who fills the new job of “Chief Quality Officer” is credible, visible, empowered to execute necessary changes, and, above all, accountable to both the company and its consumers. Should another crisis arise, the company and its “CQO” will have an opportunity to demonstrate that J&J has rededicated itself to consumer safety by reacting as responsibly as it did in the 1982 Tylenol recall.

In a recent interview, Mr. Weldon said “The people who use our products are our first priority, and we’ve let them down.” He went on to add that J&J’s response to recent issues has shaken consumer trust and that the company has “a lot to do to earn that back.”

J&J is again starting to look and sound like the company every crisis communicator once envied. If its efforts to improve quality assurance result in real and lasting reforms, it won’t be too long before this most recent recall is remembered as a mere glitch in an otherwise storied company history.

Gene Grabowski is Senior Vice President and Chair of the Crisis and Litigation Practice at Levick Strategic Communications, the nation’s top crisis communications firm. He is also a contributing author to Bulletproof Blog. Connect with him @crisisguru.

]]> http://www.bulletproofblog.com/2010/09/02/johnson-johnson-takes-a-cue-from-its-own-playbook/feed/ 0 http://www.bulletproofblog.com/2010/08/31/sixsix-six-ways-companies-should-be-leveraging-real-time-search/ http://www.bulletproofblog.com/2010/08/31/sixsix-six-ways-companies-should-be-leveraging-real-time-search/#comments Tue, 31 Aug 2010 21:11:36 +0000 Patrick Kerley http://www.bulletproofblog.com/?p=3677 st Century corporate message management.

In December 2009, Google fundamentally altered the search engine landscape by introducing its Realtime Search capability, which enables Web users to aggregate and sort the latest online information related to their keyword searches – including posts to social networking sites such as Facebook, Twitter, and MySpace. With last week’s substantial enhancements to Google Realtime Search, companies that remain asleep at the search bar are now missing out on even greater opportunities to protect their reputations and build their brands in the places more people turn for information than any other.

For those companies ready to wake up, this week’s Six@Six outlines six tips for leveraging the new Google Realtime Search features. Have you used Realtime Search to monitor, protect, or build your brand’s reputation? Share your story with me on Twitter @pjkerley.

1) Identify Problem Areas
One of Google Realtime Search’s most significant updates is the ability to refine search results by geographic location. This enables companies to uncover the conversations emanating from specific locations by simply including the desired zip code or city and state in the search. Did you just host an event that launched your first west coast store in San Francisco? Learn what people are saying about their first retail experience with your brand by searching and filtering the results by zip code. Not sure why your brand (and sales) are starting to take a turn for the worse? Narrow your search by location and identify problem stores providing a poor customer experience or specific regions where consumers are speaking out against your products or services.

2) Understand Breaking Points
Another new feature added to Google Realtime Search enables users to sort through results on a time continuum to discover what results looked like at points in history. This powerful tool allows companies to view the conversation around their brands on a timeline and uncover critical breaking points where the conversation was largely positive or negative. Users can then match the historic search results to events in the brand’s history to reveal best practices or avoid repeating mistakes.

3) Be the First to Know
Bulletproof has often promoted the benefits of Google Alerts in monitoring social and digital media for mentions of your brand. But now, the value of this tool has grown exponentially. Google Realtime Search has enhanced these alerts to now include real-time results across a majority of online properties. Similar to more targeted services such as TweetBeep, which send email alerts for specific searches on Twitter, the improved Realtime Search alerts now help you be the first to know when your brand is mentioned just about anywhere in cyberspace – and on one easy-to-use platform.

4) Track Full Conversations
Google’s mission “to organize the world's information and make it universally accessible and useful” is now embodied in its Realtime Search, which displays online comments – and especially updates from Twitter – in a “conversation view.” Rather than trying to piece together the beginning, middle, and end of a conversation between multiple Twitter accounts, Realtime Search assists brand managers in tracking the full conversation and easily indentifying brand ambassadors and adversaries.

5) Provide Proactive Customer Service
Realtime Search presents the perfect opportunity for corporations to proactively respond to their customers’ concerns and complaints. The Internet, especially easily updated social networks like Twitter and Facebook, is now the preferred sounding board for customers to share their positive and negative experiences with products, services, and brands. Rather than waiting for a barrage of phone calls to the customer service center from disgruntled customers and clients, businesses can use the new features in Realtime Search to proactively identify and respond to problems – thus saving time, money, and, most important, face.

6) Complete a Competitive Analysis
Even more valuable than a complete competitive analysis is the ability to receive instant feedback from consumers on competitors and seize the opportunity to impress them with superior service. Realtime Search enables brands to instantly respond to a competitor’s disgruntled consumers with a special offer to solicit their brand loyalty and build trust. Future marketing decisions, such as the text for search engine marketing (SEM) advertisements, can then be built around messaging that speaks directly to these potential new customers.

]]> http://www.bulletproofblog.com/2010/08/31/sixsix-six-ways-companies-should-be-leveraging-real-time-search/feed/ 0 http://www.bulletproofblog.com/2010/08/31/bulletproof-interview-special-%e2%80%93-stasia-kelly-on-corporate-crisis-response/ http://www.bulletproofblog.com/2010/08/31/bulletproof-interview-special-%e2%80%93-stasia-kelly-on-corporate-crisis-response/#comments Tue, 31 Aug 2010 12:22:56 +0000 Michael Robinson http://www.bulletproofblog.com/?p=3660 continuing series of Bulletproof Blog™ video interviews with thought leaders across multiple disciplines and industry sectors, I recently sat down with Stasia Kelly, an Of Counsel with DLA Piper, to discuss the key elements of corporate crisis response in an age of increased transparency and accountability.

Having served in key leadership positions at Sears, Roebuck & Co.; WorldCom; and AIG during several of the most highly-scrutinized corporate crises of our time, Ms. Kelly possess a unique understanding of the missteps and best practices that dictate whether companies fail or flourish in crisis.

Among the many insights shared during our chat, Ms. Kelly highlighted the importance of knowing your crisis team before they are needed. By identifying key internal and external experts – and bringing them together before a crisis happens – companies can better position themselves to control the overarching narrative before it spirals out of their control.

As one of the nation’s foremost experts in corporate compliance, government affairs, and communications, Ms. Kelly shared these and other insights with Bulletproof™.

Click the video above to view Ms. Kelly’s interview in its entirety.

Michael W. Robinson is a Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the nation's top crisis communications firm. He is also a contributing author to Bulletproof Blog.

]]> http://www.bulletproofblog.com/2010/08/31/bulletproof-interview-special-%e2%80%93-stasia-kelly-on-corporate-crisis-response/feed/ 0 http://www.bulletproofblog.com/2010/08/30/egg-recall-almost-certain-to-result-in-new-food-safety-regulation/ http://www.bulletproofblog.com/2010/08/30/egg-recall-almost-certain-to-result-in-new-food-safety-regulation/#comments Mon, 30 Aug 2010 21:15:19 +0000 Gene Grabowski http://www.bulletproofblog.com/?p=3656 bipartisan support in Congress and the backing of President Obama, legislation aimed at strengthening America’s food safety infrastructure for the first time in decades remains stalled in the U.S. Senate. In the wake of the massive salmonella outbreak that has resulted in at least 1,300 illnesses and the recall of more than half-a-billion eggs, that’s almost certain to change.

In a recent conference call with reporters, Food and Drug Administration (FDA) Associate Commissioner for Food Protection Jeff Farrar said that “The pending legislation is absolutely critical. There are numerous important measures in that bill that will give us new authorities and resources.” Among those measures are provisions setting more frequent mandatory inspections for food manufacturing facilities, granting regulators mandatory recall power instead of the voluntary process now employed, and empowering the federal government to suspend and shutter food processing plants with poor safety records.

With powerful voices in the halls of Congress now echoing Mr. Farrar’s sentiments with a sense of urgency that only a full-scale food-borne illness outbreak can create, a new regulatory reality is poised to descend upon the agribusiness community. And with a considerable expansion of regulator power – and the resources needed to exercise it – one can only assume that the opportunities for food manufacturers to raise the ire of government overseers will grow as well.

We’ve seen this movie before, most recently in 2008 after the massive 2007 recalls stemming from toys tainted with lead paint, pet food laced with melamine, and spinach and tomatoes contaminated with E-coli. Congress reacted by passing the Consumer Product Safety Improvement Act, which, among other things, raised regulatory fines ten-fold and allowed all states attorneys general to sue for damages on behalf of consumers if they think a manufacturer or shipper has acted negligently in a recall.

For most food and consumer product manufacturers, the result of the CPSIA has largely been apprehension, confusion, and significantly increased costs – especially for accidental non-compliance with the beefed-up regulations.

With that lesson in mind, U.S. agribusinesses – both publicly and privately owned – need to prepare now for the probability that a high-profile government enforcement action is on the way, along with increased financial liabilities and reputational risks.

For a start, companies should take a page from the plaintiffs’ bar; preparing Internet sites ready to go live with information at a moment’s notice, optimizing their corporate and related web pages so journalists can find favorable information quickly, and befriending journalists and bloggers who follow their business.

It’s time to invest in effective crisis communications planning and recall preparedness that is air-tight and up to the scrutiny of state and federal regulators, as well as the members of Congress who oversee them.

Gene Grabowski is Senior Vice President and Chair of the Crisis and Litigation Practice at Levick Strategic Communications, the nation’s top crisis communications firm. He is also a contributing author to Bulletproof Blog. Connect with him @crisisguru.

]]> http://www.bulletproofblog.com/2010/08/30/egg-recall-almost-certain-to-result-in-new-food-safety-regulation/feed/ 0 http://www.bulletproofblog.com/2010/08/30/bulletproof-interview-special-%e2%80%93-suzanne-rich-folsom-on-corporate-compliance-issues/ http://www.bulletproofblog.com/2010/08/30/bulletproof-interview-special-%e2%80%93-suzanne-rich-folsom-on-corporate-compliance-issues/#comments Mon, 30 Aug 2010 18:35:18 +0000 Michael Robinson http://www.bulletproofblog.com/?p=3645 continuing series of Bulletproof Blog™ video interviews with thought leaders across multiple disciplines and industry sectors, I recently sat down with Suzanne Folsom, the former Vice President, Chief Regulatory and Compliance Officer, and Deputy General Counsel at AIG, to discuss how companies can best navigate an increasingly tough regulatory environment.

Ms. Folsom was hired by AIG after the determination of the material weakness in 2008. Her primary responsibility was to coordinate and lead a team of multinational regulatory and compliance professionals in establishing, developing, and implementing a world-class global regulatory and compliance system that would mitigate overall regulatory, compliance, legal and reputational risks for AIG and its thousands of subsidiaries in more than 130 countries.

Ms. Folsom and her team were successful in creating and implementing this leading-practices global compliance framework and establishing a global regulatory function that dealt successfully with more than 500 regulatory oversight bodies throughout the financial crisis. Their efforts have been recognized by a number of key international financial and insurance regulators, most notably at the November 2009 IAIS conference in Brazil.

During our conversation, Ms. Folsom discussed the long-term value of a proactive and robust corporate compliance function; the myriad of reasons why companies can gain value when they build and maintain cooperative relationships with their regulators before a crisis descends upon them; the industries most likely to draw regulatory attention in the coming months; and the effects of the aggressive enforcement strategies that are being carried by governments around the world.

As a leading expert in global regulatory issues who played a key role in one of the most high-profile compliance matters in recent memory, Ms. Folsom shared these insights and many more with Bulletproof™.

Click the video above to view Ms. Folsom’s interview in its entirety.

Michael W. Robinson is a Senior Vice President and Chair of the Corporate Practice at Levick Strategic Communications, the nation's top crisis communications firm. He is also a contributing author to Bulletproof Blog.

]]> http://www.bulletproofblog.com/2010/08/30/bulletproof-interview-special-%e2%80%93-suzanne-rich-folsom-on-corporate-compliance-issues/feed/ 0 http://www.bulletproofblog.com/2010/08/27/sec-expands-proxy-access-puts-boards-on-notice/ http://www.bulletproofblog.com/2010/08/27/sec-expands-proxy-access-puts-boards-on-notice/#comments Fri, 27 Aug 2010 19:12:11 +0000 Michael Robinson http://www.bulletproofblog.com/?p=3626 provide investors with greater power to nominate directors of public companies. The three-to-two vote – which split along party lines with the Commission’s two Republicans voting no – enables investors that control at least three percent of a company’s stock to put their nominees for board positions on the proxy ballots that are sent out to shareholders each year.

With the change in place for the majority of public companies (those with more than $75 million in market value) ahead of next year’s proxy season, 2011 could very well be the first time that many investors see ballots that contain more candidates than available board seats. And while there is speculation that the SEC’s change may not stand up to expected legal challenges, it seems that, for the time being at least, directors are newly accountable to shareholders.

By some estimates, the debate over proxy access has been raging for decades. Indeed, the global financial meltdown, ballooning executive compensation, questionable risk management practices, and a widespread perception that board oversight has generally grown too lax, investor advocates coalesced public opinion to drive this change forward.

As a result, board members at public companies are now under greater pressure than ever before to be seen and heard as responsive to shareholder concerns and engaged in the companies they help to oversee.

Michael W. Robinson is Senior Vice President and Chair of the Corporate & Public Affairs Practice at Levick Strategic Communications and a contributing author to Bulletproof Blog.]]> http://www.bulletproofblog.com/2010/08/27/sec-expands-proxy-access-puts-boards-on-notice/feed/ 2 http://www.bulletproofblog.com/2010/08/27/weekly-web-wrap-up-for-august-27-2010/ http://www.bulletproofblog.com/2010/08/27/weekly-web-wrap-up-for-august-27-2010/#comments Fri, 27 Aug 2010 15:30:30 +0000 Patrick Kerley http://www.bulletproofblog.com/?p=3619 Bulletproof’s Weekly Web Wrap-Up offers a compilation of key discussions regarding social media’s increasing relevance to business.

Considering last week’s massive spike in interest in location-based social networking – which was sparked by the launch of Facebook Places – it is only fitting that this week’s Wrap-Up focuses on how businesses both large and small can leverage networks such as FourSquare, Gowalla, and now Facebook Places. FourSquare alone now has nearly three million users, and the seamless integration of Facebook Places opens up a potential audience of hundreds of millions – presenting opportunities brands cannot afford to overlook.
 
This week’s Wrap-Up outlines some of the ways in which big companies and small businesses are leveraging location-based social networks to strengthen brand loyalty and reach new customers, as well as other tips and tactics for successful social media engagement:

Mashable:
Top 5 Ways Big Brands are Using Foursquare
 
Business Insider:
How to Use Foursquare Effectively for Your Small Business
 
Advertising Age:
What Happens When Facebook Trumps Your Brand Site?
 
Marketing Profs
Smart Companies Don’t Ignore Brand Mentions on Social Networks
 
Convince & Convert:
Social Media Listening and Analysis for the DIY Inclined

Click here to receive the Weekly Web Wrap-Up in your inbox each week

Patrick Kerley is a Senior Digital Strategist at Levick Strategic Communications, the world’s top crisis firm. He is also a contributing author to Bulletproof Blog™. Connect with him @pjkerley.

]]> http://www.bulletproofblog.com/2010/08/27/weekly-web-wrap-up-for-august-27-2010/feed/ 0 http://www.bulletproofblog.com/2010/08/25/whats-next-the-plaintiffs-perspective-the-whistleblower-%e2%80%9cdevil%e2%80%9d-in-the-statutory-detail/ http://www.bulletproofblog.com/2010/08/25/whats-next-the-plaintiffs-perspective-the-whistleblower-%e2%80%9cdevil%e2%80%9d-in-the-statutory-detail/#comments Wed, 25 Aug 2010 20:47:19 +0000 Larry Smith http://www.bulletproofblog.com/?p=3615 In this regular feature, Bulletproof interviews top plaintiffs’ counsel for their perspective on the crises likely to affect businesses in the near future. Today, we speak to Erika Kelton, a partner at Phillips & Cohen LLP in Washington, DC, which specializes in representing whistleblowers in qui tam lawsuits.

We spoke to Ms. Kelton about the highly significant but relatively untouted new award program for whistleblowers contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which President Obama signed into law on July 21. Under the new law, individuals who provide "original information" to the SEC can receive a minimum of 10 percent and up to 30 percent of any successful enforcement action that exceeds $1 million.

What impact will the new monetary awards have on the financial services industry? In what way are they game-changers?

Erika Kelton: The first fundamental difference is that securities law violations are typically not covered under the False Claims Act. The SEC has instead had a limited program in place since 1988 that applied only to insider trading – and the awards were totally discretionary. With Dodd-Frank, in addition to the maximum 30% award, we also have a mandated 10% minimum. The guarantee of a minimum award is a compelling difference.

Remember that, particularly in this industry, people who are in a position to know of significant violations are usually very highly compensated. They are much less likely to risk so much personal and professional loss for what is to them a virtual pittance. It’s not usually a question of greed. It’s a question of risk, and the assurance they need and deserve that they’ll be standing on their feet at day’s end.

We simply need to look at the results of the SEC’s discretionary program over the last twenty-plus years to underscore the point. If you take the case against Pequot [Capital Management] out of the picture for a moment, the fact is that in all these years the SEC has made only five awards totaling $157,000. Pequot was a $1 million award, which is still by no means overwhelming.

There seems to be some question whether or not the law is in effect pending current rulemaking. What is your view?

Erika Kelton: It’s surprising that there is such confusion on that score. The new law specifically says that the whistleblower reward program is immediately operative.

It’s been suggested that the incentives in the new law may inspire employees to go directly to the SEC rather than first advise their employers. What is your view on that?

Erika Kelton: That criticism is coming from the expected quarters, and history shows it to be a specious criticism. In my experience, individuals raise their concerns internally first and only go to government authorities if issues are unaddressed or if they are retaliated against for questioning their employer’s illegality.

Awards for whistleblowers in the securities industry will not have the effect of motivating that kind of behavior any more so than have past awards for whistleblowers in other industries under the False Claims Act. If anything, the high compensation within the financial services industry acts as a balance against it.

In other words, there’s no reason to expect that the Dodd-Frank provisions will create a significantly new dynamic from what we’ve seen for years under existing law. That’s not to say that there won’t be specific instances of whistleblowers taking preemptive action, but people generally want to be loyal to their employers. They’ll go to the SEC, or any other enforcement body, only as a last result.    

If you were counseling businesses, how would you advise them?

Erika Kelton: More than ever, it’s time to review compliance programs, and to ensure they’re credible and meaningful. For example, you do not want compliance departments reporting to business or sales department heads. You do want programs that encourage disclosures and that absolutely protect the source.

Here again, it’s helpful to remember that Dodd-Frank presents the same issues and dynamics we’ve seen with the False Claims Act. If I were counseling business leaders, I’d tell them to look at model compliance programs and best practices that were driven by the False Claims Act, and I would model them for Dodd-Frank as well.

Click here to receive the Plaintiff's Perspective in your inbox each week.

Larry Smith is Senior Vice President of Levick Strategic Communications, the nation's top crisis communications firm, and a contributing author to Bulletproof Blog. Connect with Levick on Twitter: @Levick.

]]> http://www.bulletproofblog.com/2010/08/25/whats-next-the-plaintiffs-perspective-the-whistleblower-%e2%80%9cdevil%e2%80%9d-in-the-statutory-detail/feed/ 1 http://www.bulletproofblog.com/2010/08/25/recall-resurrects-the-skeletons-in-wright-county-egg%e2%80%99s-closet/ http://www.bulletproofblog.com/2010/08/25/recall-resurrects-the-skeletons-in-wright-county-egg%e2%80%99s-closet/#comments Wed, 25 Aug 2010 17:23:57 +0000 Gene Grabowski http://www.bulletproofblog.com/?p=3609 recalling a record-breaking 380 million eggs because of a salmonella outbreak certainly qualified as a nightmare scenario, it was a crisis a well-prepared agribusiness company should be able to manage. Even with the next week’s news that the total number of affected eggs ballooned to more than half-a-billion, the situation wasn’t necessarily fatal. Unfortunately for Wright County Egg, however, survival in such lingering high-profile crises often hinges on a company’s track record – and, as such, all indications point to a very rough road ahead for this decades-old family business.

In a nationally syndicated Sunday feature story, The Associated Press detailed the litany of state and federal regulatory compliance violations linked over the past 13 years to Wright County Egg and its owner, Austin “Jack” DeCoster. The fact that the violations primarily involved employment and environmental regulations – and weren’t directly related to food safety – simply doesn’t matter to the news media during a crisis. Wright County Egg has now been defined as a habitual offender, and Mr. DeCoster and his company are already finding themselves targets for plaintiffs’ lawyers, lawmakers, regulators, journalists, and consumers bent on vindication.

Wright's troubles provide an important lesson. As part of their crisis planning, organizations need to examine their reputational closets before the next incident has reporters hunting for skeletons. Every previous crisis a company has experienced is fair game – and its leaders must be prepared for the inevitability that those incidents will be intensely scrutinized during the news cycles that follow the initial story. And the longer the crisis drags on, scrutiny of past practices only gets greater as journalists seek new avenues to keep the story fresh.

For this reason, companies need to prepare straightforward responses to questions about past litigation or regulatory problems before they’re asked. When appropriate, companies might even raise the issues on their own terms with reporters before they ask about them, thus providing proper context for past events and describing remedial actions to correct previous problems.

In an environment where all companies operate in a perpetual state of near-crisis, their leaders must come to terms with the reality that a negative story on the back pages today could very well develop into tomorrow’s above-the-fold headline.

Gene Grabowski is the Senior Vice President of Crisis and Litigation at Levick Strategic Communications, the nation’s top crisis communications firm. He is also a contributing author to Bulletproof Blog. Connect with him @crisisguru.]]> http://www.bulletproofblog.com/2010/08/25/recall-resurrects-the-skeletons-in-wright-county-egg%e2%80%99s-closet/feed/ 0