Ethics Core-Tex is facing a number of problems that could result in negative publicity. At present, the company is facing multiple challenges but has escaped major headlines. Thus, its stock price has not been hit too hard as the result of the accounting accusations. For the CEO, there are a few key things that need to be done. The first move, the muzzling of the C-suite, is essential. From a public relations perspective, the company needs to speak with a unified voice. From a legal perspective, there may be limits to how much the company can say anyway.

The first step, then, is information gathering. The CEO in particular is liable under the Sarbanes-Oxley Act for anything accounting misstatements (Sarbanes-Oxley, 2014). The CEO must take personal responsibility for verifying the accounting allegations. This is necessary because there seems little doubt that the SEC will send investigators over the company, given the nature of the allegations. If the allegations are true the CEO will need to work with the SEC to deal with...

By the time word emerges that the SEC is going to investigate -- this will probably come in an SEC press release -- the damage to the company's stock will occur. The CEO therefore needs to know if the SEC is going to find anything or not.
The second step is with respect to the environmental issues. Here, the company is aware of the information and the step now is to address the problem and engage in a public relations campaign. The marketing manager is correct -- the company needs to get in front of the rumors and dictate the course of the communication, because those rumors will completely gut the stock price. Moreover, a quick response will show stakeholders that the company is well-organized and is working quickly to bring the issue to a resolution (Bernstein, 2013). The CEO should already have a crisis management team and plan in place; if not, this needs to be prioritized. The public relations…