History shows that damage caused by a corporate crisis is usually determined more by the quality of the response than by the severity of the crisis itself.

Original article can be found here. Written by Jeffry Powell, Charlie Horrell, Al Percival and Eslinda Hamzah

Poorly handled crises – product recalls, customer service missteps, labor strikes, environmental disasters, hostile takeover bids or regulatory probes – can ultimately ruin an organization’s reputation. In contrast, adversities met with a strong and swift response can actually become opportunities to demonstrate decisive leadership and a commitment to values.

While the spotlight usually falls on the CEO when a crisis occurs, successful handling of a crisis is usually the result of well-orchestrated teamwork between the CEO, board of directors and corporate secretary. The board must provide its advice and experience to management. It must also safeguard the interests of shareholders – or for non-commercial boards, their donors, taxpayers, members, citizens, students and patients. This role is more than symbolic. Investors and other observers will be dissecting the board’s every action. And it falls to the corporate secretary to ensure that processes are followed, proper documentation is kept and information flows smoothly between all parties.

But fulfilling these responsibilities demands planning in advance. Especially in a time when stakeholders are empowered by social media, the CEO and board can be quickly overwhelmed unless the right infrastructure is already in place. Broadly speaking, preparedness requires two things: establishing a crisis management plan and a communications infrastructure prior to the trigger event.

Crisis Management Plans
A crisis management plan should draw on the expertise of the company’s management, PR and legal teams. It must outline specific responsibilities of the CEO and board during a crisis. The corporate secretary then needs to support the chairman or lead director in ensuring that the plan is followed and in anticipating information and other resources the board will need to confront the crisis.

Crisis Collaboration Platforms

A communications and collaboration platform must allow the CEO and board to exchange information, deliberate and make decisions rapidly and securely. While the c-suite may be headquartered in a single location, directors will likely be geographically dispersed, particularly as more companies look to internationalize their boards. The volume of information to be shared between parties is often substantial and frequently revised.

Most companies have business continuity and disaster recovery plans to manage risks of wide scale disasters such as terrorist attacks or natural catastrophes. But these measures frequently exclude board communication from their scope, lacking provisions for the CEO to keep the board appraised and engaged if an organization’s IT systems go down. A board portal hosted independently of a company’s network provides an efficient and resilient means of communication.

The Role of Board Portals During a Crisis
In a world where overnight delivery isn’t fast enough, email isn’t secure enough and sharing PDF files isn’t easy enough, a board portal provides a compelling solution that is:

• Secure and mobile: With a board portal, information is encrypted and stored on a highly secure external server. Authorized users access the material securely through a tablet app or Internet browser on a device of their choosing.
  
• On the same page: The use of a centralized hub for data ensures the latest information is made available instantaneously, eliminating challenges in distribution and version control, and accommodating last minute updates.
  
• Decisive: Some portals enable electronic signatures for written consents. Easy voting features let members quickly respond to resolutions and approvals, track how others have responded and see how close they are to consensus.
  
• Prepared: The portal can already be loaded with crisis management plans, previous board and committee minutes, and governing documents such as bylaws and committee charters.
  
• Informed: A board portal can also provide a central location for summaries and links to news reports, blog posts, Twitter feeds and investor commentary.
  

Even the most well run companies should count on being tested by unforeseen disruptions. CEOs, boards and corporate secretaries can minimize the damage – and possibly even turn a crisis into an opportunity to shine – with thorough preparation that includes the establishment of a reliable communications infrastructure.

AuSAE Annual Partner, Diligent Boardbooks® brings security, simplicity and service to board communications.

Diligent Boardbooks® is the world’s most widely used board portal because it was created with one purpose in mind: to provide secure and intuitive access to the information that underpins the best-performing boards. So intuitive that it’s as easy as reading a book, the portal gives instant access to updated and archived meeting materials and related resources, combined with the ability to share notes, vote and access the same secure app online or offline. Robust security and privacy are found at all levels of the product — from the data hosting infrastructure, to encryption of content in transit and on the device, to security processes. 

Each client gets a dedicated account management team and unlimited consultation, training and 24/7/365 live phone support from Diligent employees. Diligent has served boards since 2001 and has a proven track record as a public company.

Contact Diligent here.