How to Implement a Crisis        Management Plan                       Lily Yan HughesVice President & Associate General C...
Agenda■ My goals for today   – How can you as chief legal officer help your organization     prepare for and manage a cris...
Never a good time…    “I don’t have time for a crisis this      week, my schedule is too full”               Henry Kissing...
“You know, I’d like my life back.”                                     _4
Cruise line in crisis…                         _5
C-suite in crisis…                     _6
What kind of crisis are we talkingabout…are you ready for them?Compliance                                ENRONNatural disa...
Does your organization have awritten disaster/crisis plan?ACC Poll, Oct 2011                                _8
Does your organization have a formalPR crisis legal review plan in place?ACC Poll, August 2011                            ...
Agenda■ Guiding principles to managing chaos   Solid foundation   Strategic planning   Effective communication   Princ...
Build a solid foundation for your companywith a robust compliance program   Code of       • Walk the walk   Conduct       ...
Strengthen your company’s solid foundation oflegal & ethical compliance with continuous training         Financial       I...
Proactively understand how new & emerging lawsaffect your company’s businesses■ Anti-corruption/anti-bribery■ Whistleblowe...
Seat at the table to help evaluate risks■ New business models & geographies■ Understand financial levers that affect your ...
Build relationships BEFORE the crisis■ C-Suite, Board, Board advisors■ Internal business teams   – HR, IR, Corporate Commu...
Agenda■ Guiding principles to managing chaos   Solid foundation  Strategic planning   Effective communication   Princi...
Strategic planning considerations■ Crises tend to share common elements of chaos:   – Lack of control and reliable informa...
Crisis management & communication plan■ Defines and assigns the crisis management team■ Outlines roles and responsibilitie...
Strategic considerations■ What’s the right timing of disclosures?    Required disclosures for public companies      Form...
Preservation of documents■ Communicate duty to preserve■ Document preservation protocol■ Forensic collection of electronic...
Will an internal investigation be needed?■ Will the company conduct an internal investigation?■ What is the proper scope a...
International or cross-borders dimensions■ Multi-agency investigations■ International or cross-border government investiga...
Reporting to the government■ SEC and other federal or state regulators   – Voluntary disclosure to one or more government ...
Company auditors & finance team■ Preserving attorney-client privilege for your company■ Maintaining credibility with the i...
Insurers■ Do we need to notify our insurance carriers?   –   D&O?   –   Which insurance policies?   –   What locations?   ...
Banks, bond holders, rating agencies &other financial or business partners■ Reductions of lines of credit?■ Liquidity conc...
Other interested parties■ Your legal team■ Your internal audit team■ Your Board & their advisors■ Your CEO and C-Suite■ Yo...
Agenda■ Guiding principles to managing chaos   Solid foundation   Strategic planning  Effective communication   Princi...
Seven Steps for Crisis Communication■ STEP 1: Verify the Crisis Situation■ STEP 2: Notification and Assignments■ STEP 3: A...
STEP 1: Verify the Crisis Situation■ WHAT happened and where?■ WHEN did this happen?■ WHO is involved?■ HOW did it happen?...
STEP 2: Notification and Assignments                                       _31
STEP 3: Assess the Communication Crisis Level               LEVEL      COMMUNICATION CHARACTERISTICS                      ...
STEP 4: Communication Management■ Message Management  –   Schedule regular internal communication updates  –   Identify ke...
STEP 5: Develop Messages■ Craft your press release(s)/internal communications■ Develop a script for conveying key informat...
STEP 6: Approve and Publish Messages     IR/CorpCommunications(Finance, IT, HR,   Legal   CEO/COO/CFOOperations, etc.)    ...
STEP 7: Monitor and Provide Feedback■ Review crisis coverage■ Identify story trends■ Identify public and key stakeholder i...
Agenda■ Guiding principles to managing chaos   Solid foundation   Strategic planning   Effective communication  Princi...
Transformative power of principledleadership during a crisis■ How can we help to showcase our company’s and  leaders’ valu...
“The Chinese use two brush strokes towrite the word crisis. One brush strokestands for danger; the other foropportunity. I...
Any Questions?■ Lily Hughes contact information:    lily.hughes@ingrammicro.com    714.382.2018    Ingram Micro Inc. 16...
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How to Implement a Crisis Management Program - Presentation: Lily Hughes, Ingram Micro Inc. - Chief Litigation Officer Summit

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For more information: emailus@marcusevans.com

Lily Hughes, the Vice President & Associate General Counsel at Ingram Micro Inc., and a speaker at the marcus evans Chief Litigation Officer Summit Spring 2013, held at the Broadmoor, Colorado Springs, March 21-23, delivered her presentation entitled "How to Implement a Crisis Management Program."

Join the 2015 Summit along with top Chief Litigation Officers and service providers in an intimate environment for a focused discussion of key new drivers shaping the legal industry today.
For more information: emailus@marcusevans.com

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How to Implement a Crisis Management Program - Presentation: Lily Hughes, Ingram Micro Inc. - Chief Litigation Officer Summit

  1. 1. How to Implement a Crisis Management Plan Lily Yan HughesVice President & Associate General Counsel March 21, 2013 121202_1
  2. 2. Agenda■ My goals for today – How can you as chief legal officer help your organization prepare for and manage a crisis? – Framework for an effective crisis management plan■ Guiding principles to managing chaos  Solid foundation  Strategic planning  Effective communication  Principled leadership _2
  3. 3. Never a good time… “I don’t have time for a crisis this week, my schedule is too full” Henry Kissinger _3
  4. 4. “You know, I’d like my life back.” _4
  5. 5. Cruise line in crisis… _5
  6. 6. C-suite in crisis… _6
  7. 7. What kind of crisis are we talkingabout…are you ready for them?Compliance ENRONNatural disastersTort/accident/workplace(employee misconduct,harassment, violence)Environmental crises Red BullSource: ACC 2011 poll of ACC Committees _7
  8. 8. Does your organization have awritten disaster/crisis plan?ACC Poll, Oct 2011 _8
  9. 9. Does your organization have a formalPR crisis legal review plan in place?ACC Poll, August 2011 _9
  10. 10. Agenda■ Guiding principles to managing chaos Solid foundation  Strategic planning  Effective communication  Principled leadership _10
  11. 11. Build a solid foundation for your companywith a robust compliance program Code of • Walk the walk Conduct • Not just talk the talk • Demand transparencySunshine Rule • Expect problem solving Right tone at • Chief compliance officer the TOP • Regional compliance officers _11
  12. 12. Strengthen your company’s solid foundation oflegal & ethical compliance with continuous training Financial Insider Export Reporting Trading Compliance Anti-Corruption/Gifts & Sexual Entertainment Harassment Code of Ethics _12
  13. 13. Proactively understand how new & emerging lawsaffect your company’s businesses■ Anti-corruption/anti-bribery■ Whistleblower/hot line reporting■ Data privacy■ Environmental■ Conflicts minerals■ Iran Threat Reduction Act■ Dodd-Frank & similar legislation outside the US■ SEC/NYSE/NASDAQ _13
  14. 14. Seat at the table to help evaluate risks■ New business models & geographies■ Understand financial levers that affect your company■ Financial accounting changes affecting your industry■ Legal trends – Patent trolls – Shareholder activism – M&A disclosure lawsuits – Executive compensation disclosure lawsuits■ Objective: legal team trusted to be asked to be at the table when evaluating risks with the business team _14
  15. 15. Build relationships BEFORE the crisis■ C-Suite, Board, Board advisors■ Internal business teams – HR, IR, Corporate Communications, Finance, Treasury, Tax, Operations, IT, Risk Management, Security, Sales, Marketing, Credit, Accounts Payable, etc.■ External business partners – CLOs & in-house counsels with key partners – Suppliers, customers, banks, etc.■ Team of “go-to” experts – outside counsel; consultants■ Government regulators _15
  16. 16. Agenda■ Guiding principles to managing chaos  Solid foundation Strategic planning  Effective communication  Principled leadership _16
  17. 17. Strategic planning considerations■ Crises tend to share common elements of chaos: – Lack of control and reliable information; panic; anxiety■ Advance planning provides a path to manage chaos: – Address safety concerns – Protect the company’s reputation while maintaining credibility – Mitigate litigation and other damages  Civil and criminal  Shareholder value – Return to normal business operations as soon as possible■ CLO in best position to prevent silos with big picture _17
  18. 18. Crisis management & communication plan■ Defines and assigns the crisis management team■ Outlines roles and responsibilities of the crisis team■ Details the steps to take in a crisis event■ Indicates who to contact, resources that are available and procedures to follow■ Provides a platform for training, testing and improvement _18
  19. 19. Strategic considerations■ What’s the right timing of disclosures?  Required disclosures for public companies  Form 8-K event? Regulation S-K?  Voluntary statements – “Now” by public relations versus “Wait” by legal team – Prompt response shows transparency and responsiveness – Duty to update the market■ Aim for positive, caring and consistent messages and emphasize remedial measures when appropriate _19
  20. 20. Preservation of documents■ Communicate duty to preserve■ Document preservation protocol■ Forensic collection of electronic data■ Maintain chain of custody■ Anticipate scope of document review and production _20
  21. 21. Will an internal investigation be needed?■ Will the company conduct an internal investigation?■ What is the proper scope and scale of the investigation?■ Who will lead the investigation? – Independent law firm? – Independent committee of the board with advice from an independent law firm? – Forensic or other consultants? – CLO and team’s involvement?■ Establish appropriate processes to show unbiased review and sharing of independent conclusions _21
  22. 22. International or cross-borders dimensions■ Multi-agency investigations■ International or cross-border government investigations or lawsuits – Data protection laws – Statutes that block production of documents – Cultural differences – Privilege _22
  23. 23. Reporting to the government■ SEC and other federal or state regulators – Voluntary disclosure to one or more government agencies – Benefit of voluntary self-reporting requires careful timing – Settlement documents with the government are public■ Congressional inquiries■ Clear, complete, balanced reports■ Oral versus written reports _23
  24. 24. Company auditors & finance team■ Preserving attorney-client privilege for your company■ Maintaining credibility with the independent audit firm■ Oral versus written reports – They may take notes that could become part of their work product■ Section 10A Notification■ Crisis affecting company’s ability to file periodic reports■ Setting up reserves for liability _24
  25. 25. Insurers■ Do we need to notify our insurance carriers? – D&O? – Which insurance policies? – What locations? – How often do we need to update them?■ Balance between sharing information to maintain insurance coverage and waiving of privilege _25
  26. 26. Banks, bond holders, rating agencies &other financial or business partners■ Reductions of lines of credit?■ Liquidity concerns?■ Potential increased cost of funding?■ Effect on debt ratings?■ Covenant compliance?■ Waiver of covenant compliance required?■ Duty to report “material adverse effect”■ Trigger of “material adverse effect”?■ Trigger any events of default? _26
  27. 27. Other interested parties■ Your legal team■ Your internal audit team■ Your Board & their advisors■ Your CEO and C-Suite■ Your management team■ Your employees■ Your shareholders■ Institutional shareholder advisory firms■ Plaintiffs bar _27
  28. 28. Agenda■ Guiding principles to managing chaos  Solid foundation  Strategic planning Effective communication  Principled leadership _28
  29. 29. Seven Steps for Crisis Communication■ STEP 1: Verify the Crisis Situation■ STEP 2: Notification and Assignments■ STEP 3: Assess the Communication Crisis Level■ STEP 4: Communication Management■ STEP 5: Develop Messages■ STEP 6: Approve and Publish Messages■ STEP 7: Monitor and Provide Feedback _29
  30. 30. STEP 1: Verify the Crisis Situation■ WHAT happened and where?■ WHEN did this happen?■ WHO is involved?■ HOW did it happen?■ WHAT is currently being done? _30
  31. 31. STEP 2: Notification and Assignments _31
  32. 32. STEP 3: Assess the Communication Crisis Level LEVEL COMMUNICATION CHARACTERISTICS • Media have immediate and urgent need for information about the crisis. CEO may need to provide opening 4 statement of empathy/caring. HIGHLY • One or more groups or individuals express anger or INTENSE outrage. • Broadcast and print media appear on-site for live coverage. • Crisis causes growing attention from local and regional media. • Media contacts non-Crisis Communication Team staff 3 for information about the crisis. INTENSE • In addition to the media, shareholders and community partners are present at site. • Affected and potentially affected parties threaten to talk to the media. • Crisis situation may/may not have occurred; the 2 situation is attracting slow, but steady media coverage. MODERATELY • External stakeholders receive media inquiries. INTENSE • The public at large is aware of the situation/event but it is attracting very little attention. 1 • Crisis attracts little or no attention. MINIMALLY • Pre-event information requests are received. INTENSE • Public and/or media are virtually unaware of crisis. _32
  33. 33. STEP 4: Communication Management■ Message Management – Schedule regular internal communication updates – Identify key audiences – Start crisis inquiry log from public and/or media – Select and/or assign spokesperson(s) (site and/or corporate)■ Communication Logistics – Identify main on-site contact – If necessary, establish communication operation center – Address other logistics _33
  34. 34. STEP 5: Develop Messages■ Craft your press release(s)/internal communications■ Develop a script for conveying key information points■ Develop or refer to a list of questions that could be asked by a variety of audiences about the crisis■ Modify pre-scripted messages or develop new messages■ Be prepared to address the company’s record for the relevant crisis situation (i.e. financial integrity, treatment/safety of employees, etc.)■ Identify the best methods for delivery of key messages■ Monitor crisis and update messages based on the crisis■ Approved spokesperson(s) should be prepared for interviews _34
  35. 35. STEP 6: Approve and Publish Messages IR/CorpCommunications(Finance, IT, HR, Legal CEO/COO/CFOOperations, etc.) Legal _35
  36. 36. STEP 7: Monitor and Provide Feedback■ Review crisis coverage■ Identify story trends■ Identify public and key stakeholder issues■ Identify your Lessons Learned _36
  37. 37. Agenda■ Guiding principles to managing chaos  Solid foundation  Strategic planning  Effective communication Principled leadership _37
  38. 38. Transformative power of principledleadership during a crisis■ How can we help to showcase our company’s and leaders’ values in action?■ Potential conflict between the “best” legal advice and the principled way to manage a difficult situation■ Take a risk and seize the opportunity with principled leadership _38
  39. 39. “The Chinese use two brush strokes towrite the word crisis. One brush strokestands for danger; the other foropportunity. In a crisis, be aware of thedanger--but recognize the opportunity.” John F. Kennedy _39
  40. 40. Any Questions?■ Lily Hughes contact information:  lily.hughes@ingrammicro.com  714.382.2018  Ingram Micro Inc. 1600 E. St. Andrew Place, Santa Ana CA 92705 _40

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