Ethics Review Committee -- Crisis Management Ethics Review Committee

Relative Values of Proactive and Reactive Thinking in Determining an Action Plan

The first consideration is to limit immediate and future damages to the firm. Two courses of action must be undertaken: Crisis communications and client relationship management. Both action plans will require consultation with the Legal Department and the Compliance Department.

Crisis Communications

A position of managing the company's reputation and ensuring it survival must be undertaken. Generally, public relations employees in an agency are aware of the steps to take for crisis communication. A crisis communications action plan must be developed that follows the best practice guidelines for crisis management. These guidelines are detailed in the next subsection.

Rules for crisis management. The people involved in managing the crisis communications for this incident must be fully briefed on the particulars. Of utmost importance is to establish who will be the key contact -- the hub through which all communications flow -- and which method of contact will be used. If it has not already been established, each team member will need to know what role they will play during the crisis management situation (Leighton, 2008). Further, each team members must have a list of the tasks that have been assigned to them and that must be accomplished according to the designated schedule. A clear message regarding any deviation from the plan should indicate to whom problems with plan execution will be escalated. Typical tasks include the following: Internal communications and media relations (generally, this falls to an experienced PR staff member); briefing members of the Board of Directors; media monitoring / online monitoring; and keeping staff informed on an as needed basis (Leighton, 2008).

A message must be immediately constructed that will be used in the event that the media gets wind of the crisis. It must be the sort of message that journalists will actually use, and not some soft message about company mission, values, and history (Leighton, 2008). It is extremely helpful to have draft statements and responses available. At the very least, the company must have ready access to background facts and any relevant Q&A about the company. The company must be able to provide speedy responses, act quickly to restrict internal communications, and control the situation. Any response, should it need to be conveyed, must be quickly dispatched. More importantly, thinking and actions must be speedy but not panicked (Leighton, 2008). The worst case is would be to panic and try to catch up to any media story released with poorly articulated messages (Leighton, 2008). The goal is release responses to the media, but at the company's pace and on the company's terms -- make the media respond to the company and not vice versa (Leighton, 2008). In order to take control of crisis communication, it is critical to have prepared images available so that the media does not dredge up unflattering images in order to fill any gap (Leighton, 2008). Further, the media should be aware of the media-trained company spokesperson with whom they will be able to communicate.

Define Critical Steps in the Decision-Making Process

The Ethics Committee must move with dispatch, but it also has an obligation for complete fact-finding that comprehensively represents the company's situation and any potential impact on the client. The first step in the Ethics Committee's action plan is fact-finding. People who have first hand information about the situation must be interviewed. Further, the Ethics Committee must ensure that the company takes no actions that can be construed as having a chilling effect on full disclosure by any employee with knowledge about the situation. Worst case scenario is having the Ethics Committee take action without having carried out effective and comprehensive due diligence, and later to have some bit of damaging information surface.

The second step in the action plan is to...

Again, this step requires that the Ethics Committee consider the risks not only to the company, but to the client, as well. A concerted effort must be made to ensure that any response taken by the company to the situation will be found to be in compliance with any laws and regulations associated with the pending IPO.
Determine Considerations in the Decision-Making Process

Decisions made by the Ethics Committee will be based on a basic rubric that begins with legal requirements and ends with company credibility. The reason for this sort of decision-making rubric is based on the life-cycle of crises. For crisis situations that involve legal repercussions, the life-cycle of the crisis will typically run longer than a crisis situation that implies that a company is not as credible or viable as the company conveys. The Ethics Committee will need to consult with the Legal Department to determine if a repudiatory breach of contract has occurred. A repudiatory breach of contract involves the very core of the contract with regard to the reason for the contractual agreement, and it "evidences intention on the part of the party in breach that they no longer intend to be bound by an essential term of the contract" ("Repudiatory breach," 2011). At issue is whether breach can occur if an essential term of the contract is implied, but not stated -- as in this case, where new market research was necessary to identify the current status of the market opportunity. Contract law does permit a charge of implied breach of contract in which "legal duties may be created that the parties did not expressly or specifically state in the contract. Some duties are implied through the act of making the contract" ("Breach of Contract," 2011).

Identify a Creative, Innovative, and Optimal Solution to the Problem

with Appropriate Justification

A primary consideration in any solution to the crisis is has to do with the quality and longevity of the relationships between the company and the client. With sufficient good will historically banked in the relationship, the two parties may be able to negotiate an arrangement that will keep the media at bay and permit them to move forward with a plan that contains damage to the client and to the company. If the client has not moved forward with the market opportunity -- which presumably they have not since the final presentation has not yet occurred -- then the company may be able to forestall any activity related to the partner's consultation. If there is time to do the requisite market research prior to the presentation, then that should happen immediately and a new report and presentation book should be generated. The partner can be removed from the assignment and another partner be sent as a replacement, following some acceptable explanation to the client. Retraining of staff should follow the resolution of the immediate crisis, and messages from the Board and the CEO should contain the company's commitment to ethical practices and clarity about repercussions for those who do not follow them.

If a preliminary report has been circulated to the client, then a second course of action is necessary. A commensurate consultation with a different partner could be offered to the client. Regardless, some form of discipline enacted toward the partner will need to take place, and be communicated to the client. The client must be assured that the issue is an isolate one, that amends will be made, and that every precaution shall be taken to ensure that trust is not violated in the future. Retraining of staff should be immediately scheduled and the associated messages regarding ethical practices should circulate as soon as possible.

Outline the expected organizational impact

Assuming the matter of the market research problem could not be resolved, and unless there are substantive, longstanding relationships that offer a form of immunization to…