The largest and growing threat to corporate value and executive reputation is a crisis. And they seem to be happening with increasing regularity.
Heightened geopolitical risk, cyber fragility and social media amplify uncertainty than ever, increasing the chances of any organisation experiencing a crisis or related event. Societal changes in the USA, random acts of terror, the rise of nationalism in Europe – reflected in Catalonia and elections across the continent – reflect a fragmenting social mood exacerbated by other factors, economic, financial, cyber-attacks, corporate misdeed, the fall of icons in the media or politics as well a company specific high-impact operational and technological failures.
Companies are no concluding that it is no longer a question of ‘if’ they will face a crisis; it is plan and simply ‘when’ and ‘what type’. The questions now is ‘how prepared’ the company is to deal with it and is it doing all it can to prevent them. Whilst some argue the most crises could have, and should have, been predicted and avoided in some form – and we certainly believe this is possible – there are still events which surprise, are un-preventable and have major impacts on a company.
With the ability to affect all aspects of the value chain and personal reputation, crises are now firmly on the agenda of boards and executive directors and devastate promising careers. The reputational impact lingers far longer than the recovery period.
In this article we explore the increased threat posed by crises to the reputation both of companies and of individual directors, along with some useful questions to assess how fit for purpose your crisis prevention activities and preparation have been so far.
David Viles, Crisis and Resilience Lead Partner
David Viles began his career at Arthur Andersen in London. After the demise of Andersen, David joined Deloitte and was a senior partner in Deloitte’s risk practice, and the firm’s own Chief Risk Officer, before joining BP. At BP David was involved at the heart of figuring out what happened and implementing solutions following the world’s most scrutinised corporate crisis - the Gulf of Mexico oil spill.
His analysis and insights into the underlying causes of issues and crises have created a different perspective for his clients; to focus on prevention and not just preparing for when a crisis might occur– by avoiding the incidents, and managing the issues, that can destroy value and reputation.
Rick Cudworth, Risk Advisory Partner
Rick has over 25 years’ industry-leading experience in Crisis Management and Resilience. He has been interim Group Head of Resilience for two global banks has supported and facilitated executive leadership in responding to crisis events. He is a recognised industry leader in his field and Chair of the British Institution Technical Committee for Continuity and Resilience.
Simon Cuerden, Financial Advisory Partner
Simon is head of the Disputes & Investigations function within Deloitte Forensic in the UK, leading a team which includes over 20 partners and directors. He has extensive experience of working with special committees drawn from the boards of organisations to oversee forensic reviews and investigations into sensitive incidents and circumstances which have led to public, regulatory and government scrutiny. Simon has interacted with, and overseen the preparation of reports and material that have been provided to, various regulatory bodies. Simon is also an experienced disputes practitioner, acting in court, arbitration and determination processes.