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The Turnbull Report encompasses issues
relating to electronic media now that stakeholders
expect and demand information in
real time and email has raised the expectations
of shareholders regarding how quickly
companies respond. A typical contingency
plan to meet the demands of the Turnbull
report can be seen from Accenture’s business
risk management process.
• Establish goals.
• Assessment of the risk.
• Develop risk solutions.
• Design and implement controls.
• Monitor and feedback.
• Improve the process.
For the above six stages to be successful
Accenture notes that the quality of information
is crucial for sound decision making. Each
of the above stages must ‘generate and use
time relevant and reliable information’.
Crisis management specialists, Regester and
Larkin, state ‘in today’s complex environment,
organizations have to understand and
respond rapidly to shifting public values,
rising expectations, demands for public consultation
and an increasingly intrusive newsmedia.
This is particularly crucial when things
go wrong.’
Brian O’Connell writing in the Investor
Relations Journal suggests ‘the internet has an
estimated 2 billion pages of information and
is growing at a pace of 100 million pages per
month’. The main crisis arising from this trend
is the growth of bulletin boards or chat rooms.
It is now possible for an individual to post
any sort of information, accurate or inaccurate,
on one of these sites and therefore spear
illicit and inaccurate information about the
company and the management. This suggests
the need for these sights to be monitored
closely and outsourcing companies now exist
who will undertake search and monitoring on
behalf of organizations such as banks. The
Investor Relations Society states ‘mishandling
bad news creates a crisis of confidence in the
ability of a company to manage its affairs
properly. The result can be disastrous for
investors, employees and customers. In some
cases a company may never recover.’ The society
recognizes that it is the responsibility of
the communication department to handle
events in a professional manner.
The London Stock Exchange points to two
levels to crisis management. The first level is
where a company should look for anything
within its business that may cause a crisis, the
second level concerns preparation for specific
issues. For example, where a bank may be in
the middle of talks concerning a takeover or
merger with another bank, it should be
assumed this news will be leaked to the
media. This sort of issue is relatively predictable
and therefore plenty of preparation
should and could be undertaken in the form
of pre-prepared or holding statements for the
press and other media groups and preparations
and training of management on what to
do and say approached by the media or other
parties requesting information. In a report by
the UK Department of Trade and Industry
‘Creating Quality Dialogue’ (1998) it was
stated that only 21 per cent of fund managers
think that smaller quoted companies, for
example, are proficient at communicating
information. Imagine how much worse that
could be during a crisis.
The organizational crisis matrix in Figure
18.4 suggests the extent to which different
parties have control over different types of
crises at any given point in time. Each of the
crises detailed has the potential to damage
an organization’s reputation if the amount of
© 2004 Sandra Oliver for editorial matter and selection;
individual chapters, the contributors