Mintz On Air: Practical Policies – An Abridged Guide to Crisis Management

In this episode of the Mintz On Air: Practical Policies podcast, Member Jen Rubin and Crisis Management and Strategic Response Chair Erek L. Barron dive into the world of crisis management and discuss the myriad of considerations a business needs to make in a time of turmoil. This episode is part of a series of conversations designed to help employers navigate workplace changes and understand general legal considerations.

Jen and Erek discuss:

1. Understanding how the best way to manage a crisis is to prepare for it.
2. The important as well as detrimental role that communication plays in a crisis.
3. The importance of a “Chief Crisis Officer” and some practical advice on managing the csuite in a crisis.
4. What to do when an internal investigation is complete.

Listen for insights on how companies can approach DEI reporting thoughtfully and strategically in this new paradigm.

Practical Policies – An Abridged Guide to Crisis Management Transcript

Jen Rubin (JR): Welcome to Mintz On Air , the Practical Policies podcast. Today's topic is “An Abridged Guide to Crisis Management”. I'm Jen Rubin, a member of the Mintz Employment Group with the San Diego based bicostal Employment Practice representing management, executives, and corporate boards. Thank you for joining our Mintz On Air podcast. If you have not tuned into our previous podcasts and would like to access our content, please visit us at the Insights page at mintz.com or find us on Spotify.

Today, I'm really pleased to be joined by one of my newest Partners, Erek Barron, who is based in our Washington, DC office. Erek is the former United States Attorney for the District of Maryland and has joined the firm's White Collar Defense and Government Investigations Practice. Erek will be leading the Mintz Crisis Management and Strategic Response team from that practice. Needless to say, as the former United States Attorney for the District of Maryland, a former state legislature, and a former private practitioner, Erek has both extensive experience and a unique perspective when it comes to high stakes litigation, investigations, and corporate matters. We are thrilled that you've joined the firm, Erek, and I really appreciate you taking the time to spend a few minutes discussing some practical suggestions for companies facing serious, bet the company, and needless to say, highly sensitive challenges. So welcome, Erek, and thank you for joining me.

Erek L. Barron (EB): Jen, it's good to be with you. Thanks for having me.

JR: Let's be honest, okay? There's no way to provide an abridged guide to crisis management. My apologies for the deception in the title of this podcast. But what Erek and I aim to provide you with today are some high-level thoughts for corporate counsel, Chief Risk Officers, or human resources professionals, which by the way, I'm going to collectively call Chief Crisis Officers, to keep in mind in the immediate aftermath of learning about some potentially highly inflammatory or problematic challenge facing a corporation, especially a public corporation. We could provide a really long list here, but keying off the term abridged, let's assume it's something that, for example, could result in criminal charges being brought against a corporation or a scandal involving a member of the C-suite or the corporation's board. Let's make that our jumping off point. I'd like to frame our discussion in this manner. Think about how to manage a crisis in light of what are some very brief, though generic decisions and actions that might provide a framework, particularly against what may be a very challenging and fast moving crisis. So Erek, with that starting point, can you tell us what you think the jumping off point is for crisis management framework?

The Psychology in a Crisis

EB: I think it might be helpful here to first understand the natural mindset at this point in a crisis, the psychology of a crisis, so to speak. There's shock. There's a lot of emotion. It's potentially traumatic. In this state of mind, an organization may be off kilter. Whatever has happened is an abnormal circumstance, it can mean that the normal processes may be thrown off, thrown by the wayside, which can make matters worse.

In this state of mind and with the reputation of the organization on the line, even the most professional among us may forget the mission of the organization, the organization's core principles. The well-tread policies and procedures that we always follow might be thrown off. With that in mind, I think we need to be prepared and have a plan. We need to practice that plan, do tabletops. We need to have independent help on call - a cool head to help us navigate and pull all the pieces together. Just like every building has a sprinkler system and fire extinguishers, you have emergency contacts and you do fire drills. You may occasionally do CPR training in the office. Similar to that, you need to have a basic ongoing crisis management plan and an emergency plan.

The crisis management plan helps to prevent crises from happening in the first place. They help to build trust and reduce the impact of a crisis if it does happen. It can help build those relationships that we need to constantly build with those who support well need in the crisis, like community stakeholders, law enforcement, media allies. I think a good crisis management plan will help build the organization's reputation for doing the right thing, the right way, for the right reason, and the organization's reputation for having a positive impact. This way you're in a better position for when an actual emergency or crisis does occur. If it does, you need an emergency plan so that you know who's in charge of what and who are the backups for the key people in place. Who's in charge of security and liaising with law enforcement? Who and how do we investigate the facts? What's the communication process when a crisis occurs? And who does it involve? How are we protecting the attorney-client privilege and confidential communications? Who needs to be contacted? Who are our key internal stakeholders, our external stakeholders, our media allies? Where are the important documents, such as insurance policies and indemnity agreements, employment agreements and where are they? Who has them? How often are they updated? Once you have these plans, you can't just put them on the shelf and let them grow dust. You need to practice so that you're prepared to handle a crisis with patience and according to the organization's mission, its core values, its policies and procedures. Tabletop exercises are good for this.

To sum it up, you need to understand the mindset of a crisis. What mindset will the organization and its key people be in when it happens? Plan ahead and then practice, practice, practice.

JR: It sounds like we're talking about planning and the pre-thinking and the practicing. It seems to me that a crisis has got to be stressful, right? Everybody would agree with that. But the planning will take some of the stress out of dealing with that crisis.

Plan, Plan, and Plan Some More

EB: It’s said that a bad plan is better than no plan at all. But in a crisis, if you don't have a plan, it actually makes things a lot worse.

JR: So let's assume that we have the plan. Let's assume we've planned for the worst. We've got everything pulled together, we've done the tabletops, we've thought about what is our mission and does everything kind of follow from that. What are some of the key action items, the Chief Crisis Runners or the Chief Crisis Officers need to keep in mind as they move toward implementing the plan.

EB: In many ways it's back to basics. Take a deep breath, get your governing documents as quickly as possible. We're talking about the bylaws, the mission and vision statements, the relevant policies and procedures. These are kind of like your organization's constitution. You can safely lean on them. They're well vetted. This is what you're supposed to go to in a crisis. Take a deep breath and contact your counsel, preferably outside counsel as soon as possible. They can help you figure out the right process and help you protect communications. This is very important in a crisis. Then take a deep breath again. Remember, you rarely, if ever, know all the correct facts initially. Oftentimes there's the rumor mill, there's the grapevine. Since when has the rumor mill and grapevine ever been right? It's certainly not going to be correct in a crisis. So I would say stay away from unverified opinions. Don't repeat those things as if they're gospel. I think you need to be mindful of the records that email and texts can create and pick up the phone. That's a better way to communicate in a crisis.

Then take a deep breath again and make sure that the organization leadership hears about whatever has happened or may have happened from you first. We're talking about the Board Chair or Lead Director, whoever the board representative may be. You might need to schedule an emergency board meeting pursuant to the governing procedures of the board. Speaking of governance, you might consider setting up a special committee. This will help control the flow of information and will keep the board focused on the right things.

JR: It's interesting to me, one of the things that you mentioned was not relying on unverified reports and the rumor mill and grapevines.

And we, of course, know all these things exist in a business. I just want to add a notion here that is becoming, unfortunately, prevalent is this concept of deep fakes and how AI may take over something and try to replicate it. I really want to echo the concept of picking up the phone and speaking to someone you know and making sure that you have that human contact to make sure that information that's verifiable information is being transmitted properly. It's something that I think people can lose sight of or, by the way, take for granted. It's very important for these Chief Crisis Officers to keep in mind as they move forward. It's hard in the middle of a crisis to take that deep breath that you keep counseling us and the patience and going back to the plan. But really thinking about what the next steps are and making it happen is

is really important. Managing personnel is something that I think people sometimes lose sight of. Of course, I'm an employment lawyer and I deal with employment issues all the time, and employment issues deal with people and how people react and manage and communicate. But how do you, for example, handle telling a CEO: “Hey, that there's been this issue and you can't be a part of managing this issue”? How do you deal with folks in the c-suite who want to manage things that are going on that it may not be appropriate to have them be involved in.

Managing the C-Suite During A Crisis

EB: Sure, it's a good question. It's a certain extent with these executives feel like they're built for right? This is the time, the action time for them when their organization needs them

But I think it's kind of best to remind them, go back to those governing documents, go back to the policies and procedures, and let's not step outside of those. Let's be consistent. Moving forward in a crisis where you have to figure out what the facts actually are, that may mean that communication is on a need-to-know basis. Once you determine an approach for the investigation and handling any crisis, preferably with counsel, you need to determine who needs to be excluded from the matter and who needs to be read in. As a practical matter, some members of the executive management team will need to be consulted, whether it's the General Counsel, the CFO, the Human Resources Officer, the Chief Technology Officer, or some combination of all of them may, as a practical matter, need to be consulted. Determinant on the situation, if an executive is to be excluded, then they may need to be formally put on some sort of administrative leave. This might be called for by the situation of the crisis, but every action should be consistent with the governing documents, the bylaws, or maybe the executive has an employment agreement. You need to ferret these things out, make sure you're being consistent with them, and make sure that you're being true to the integrity of the investigation and protecting the organization. Explicit and clear direction to those involved regarding confidentiality and instructions about retaining potential evidence need to be made.

Communication in Crisis

JR: One thing I just want to key off for a moment, is something that I have found in my practice, that people think that they're engaged in a text communication and, you know, it's just a very happenstance type of communication or using communication programs such as WhatsApp and a few other things. These are still communications and there's still communications that may be potentially discoverable and there's still communications that actually can be replicated and shared with other folks. It’s important to keep in mind on that confidentiality piece and the instructions on maintaining communications and being very consistent in how those communications are handled when there's a crisis. We've got the plan being executed, in a very thoughtful and patient way. We've got communications to the right folks. What happens next?

EB: Well, it might be hurry up and wait. But you have to practice patience and assume, again, that the initial, “facts” may change drastically as the investigation unfolds.

This can be really hard. There's of course, a natural tendency that people and the organization will want to tell their story. They'll want to protect the organization. There'll be a lot of pressure from the outside. The media and that rumor mill and that grapevine, they'll want to fill the void with information. There may be incorrect information flying around that people want to correct and get the record straight. But that's what the investigation is for. So often, what's occurring behind the scenes is outside the control of the board and the c-suite. I is challenging to conduct business as usual in the face of this crisis disruption. While this is playing out, there are some things I think that certain individuals can do, such as, getting the relevant documents, insurance policies, contacting counsel, and understanding the scope of corporate indemnity obligations, and working with communications experts on the appropriate communication plan when it is time to communicate. Typically, these activities should be conducted in conjunction with counsel to preserve privilege. But these are some useful things that can be going on behind the scenes while an investigation is occurring.

JR: First of all,

when there's a crisis going on, sometimes it's very useful, at least for the folks who are managing the crisis, whether it's the Chief Crisis Officer or somebody else, to have a focus on, are the practical things I need to do. I need to line up the bylaws and make sure I have any indemnification agreements and make sure I have these insurance policies and have them at the ready instead of trying to locate things that are difficult to locate or, by the way, may be in the hands of somebody who's the target of an investigation. That's something for folks to think about in advance as part of the plan, and that will help facilitate the investigation and the process that needs to play out. That's something else to think about. Assume, Erek, we've done all these things: We've gone through our process; We've executed on the plan; We've been patient. Now you have the investigation results, whether they've come from an outside investigator, outside counsel, whatever it may be. What do you do with the results once they come in?

Last Steps: What To Do Once the Investigations Completes

EB: There's been an investigation. There's a report. It may be oral, it may be written. You need to finalize the reporting in conjunction with counsel. The status, what should be done with the report. This is really a critical business and legal decision. Questions like: Is it just a draft? Does it remain in draft form? Is it put in some kind of final form? Should it be presented to the board or subcommittee of the board? If action is to be taken, should the board discuss and act on the recommendations in the report? If no action is recommended, are there reasons to record that in the corporate minutes? You know, all of these are really important business and legal decisions that should be made with counsel.

Once a decision is reached, what happens next and in what order? Are there resignations or terminations? Do they need to be communicated to the markets? Should communications be made to internal stakeholders, to your employees? Are there any external stakeholders that need to be communicated to in person or specifically? Whatever the decision, there needs to be a plan to support it, a rationale to support it. If there's a bright side, to a crisis, it's that it's a tested opportunity to show that the organization in the toughest of times does the right thing, the right way, for the right reason, and has a positive impact.

JR: That is a fabulous summary. No way can I improve upon it because I completely agree. Having that plan, how you execute on it, and how you come out the other side. I would add, hopefully

the crisis will come to an end and I's not an ongoing crisis that's got a hold of the daily business and instead folks can go back to running the business of the organization. Hopefully there is an end and you can look back and say, “you know, hey, how did we perform?”. I mean, it's really a measure of a company's performance, and as a C-suite, as coming up with these plans, being thoughtful about how they're implemented. Then possibly taking a look back and figuring out how they could be improved upon. That's always part of the performance management.

Thank you, Erek. I really appreciate you stopping by. I do think we were able to give the abridged version of a crisis management, right? It's certainly hard to do. It goes without saying that so many of these things are so fact specific and it might be necessary to add a few things or take some things away, but the planning, the process, and hewing to the mission, I think those are things that are going to apply in every event. And really appreciate your thoughts on this and really excited to have you at the firm leading this practice group, which I think is really needed in today's business where I think everybody should assume a crisis will eventually occur.

Once again, I'm Jen Rubin and thank you, Erek Barron, and to those who've tuned into our Practical Policies podcast.

Visit us at Mintz.com for more content and commentary from Mintz or look for us on Spotify. Thanks again.

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