A recent survey of 43 directors of public and private boards revealed that nearly 90 percent are extremely or somewhat concerned about a societal crisis striking the company of which they are a director. An additional 84 percent of the directors said their company wasn’t prepared for crises ranging from mass shootings and trade wars to #MeToo and Twitter attacks from President Trump.
The survey was fielded immediately following a day-long simulation of a fictitious societal crisis created by Peppercomm, in partnership with Directors & Boards Magazine.
Other key findings included:
- 77 percent of the participating directors were worried about their personal exposure and reputation as a result of the crisis.
- 14 percent were EXTREMELY worried about their personal exposure.
The directors’ biggest concerns about a societal crisis impacting their company included:
- Reputational damage (86 percent)
- Business disruption (58 percent)
- A drop in stock price (44 percent)
NOTHING NICE ABOUT I.C.E.
The simulated societal crisis (created by Peppercomm) concerned a publicly-traded company that had historically taken strong stances on human rights, but had just been “found” by employees to be providing I.C.E. with sensitive data about undocumented immigrants entering the country. Many employees were threatening to go on strike, BUT the CEO refused to cancel the I.C.E. contract.
After presenting the simulated crisis scenario to the directors, Peppercomm executives asked the group to answer such questions as:
1.) What’s the first step you would take?
2.) Would you issue a statement? If so, what would the wording be?
3.) If you decide not to issue a statement, explain the reasons why you’d remain quiet.
4.) What questions would you ask of the CEO (and her/his C-Suite)?
5) If you do decide to issue a statement, who would make it? The CEO? A board director? The CCO? Someone else? Why?
6.) Which stakeholder audience would take priority? Shareholders? Customers? Employees? Another group entirely?
7.) Would you engage outside counsel? If so, which ones?
8.) How would you define post-crisis success?
The simulation, which was held at New York’s Harvard Club on December 5th, will further inform Peppercomm’s already considerable knowledge of societal crises.
Every director surveyed agreed on one thing: the worst time to test a company’s societal crisis readiness is in the midst of an actual mega incident.