by Cari Robinson and Amelia Fogg

It is essential for board directors to understand and test whether their companies are prepared to handle unexpected and critical situations. In most cases, it falls to management to run point during a crisis, but boards are responsible for overseeing the company’s response, monitoring the situation, providing guidance and support, and making key decisions throughout the crisis. In addition to ensuring response plans are in place, directors must also understand how vital effective communication is for navigating and recovering from a crisis, as a company’s response to a crisis (or lack thereof) often defines reputational impact more than the issue itself. Clear, credible, and timely communication helps control the narrative, demonstrates accountability, and builds trust. However, saying the wrong thing in a crisis can erode trust, inflame the situation and subject the board and the company to unnecessary risk and liability.

How Should Boards Prepare?

Boards must understand their organization’s anticipated and unique risks and plan for them. The most effective way to do this is by ensuring the company has crisis communications plans that contemplate a range of potential crisis scenarios with messaging that can be tailored and deployed in real-time; define the response team (which can include external consultants, like law firms and communications teams); spell out protocols; and designate potential spokespeople.

Without an established protocol that has board-level buy in, it is difficult to move quickly and maintain a measured, strategic approach that ensures organizational coordination. Failure to prepare too often results in delayed responses, conflicting messaging, and/or defensive or tone-deaf communications that damages a board and company’s credibility and erodes trust among key stakeholders.

To protect their organizations, boards should engage in crisis planning efforts, including:

1. Identifying key vulnerabilities and crisis scenarios

Potential crises and risks will vary based on the company but may include scenarios like executive misconduct, a leak of confidential information, or a data breach. These scenarios that a company could conceivably face will form the foundation of the crisis playbook that outlines various situations and corresponding response strategies, and it’s critical that the board, in addition to management, has discussed these potential situations.

As part of this exercise, it is important to consider when it’s appropriate for the board to communicate and when communications should come from management or a third-party advisor. This is a strategic decision, but a miscalculation risks undermining confidence in management or, alternatively, signaling that the organization is not taking an issue seriously enough. It is also important that boards are prepared for a situation where they may have to assume a more active role and act or communicate on behalf of management. This can happen, for example, when replacing a CEO unexpectedly or when addressing serious financial irregularities or mismanagement.

2. Understanding key audiences

Failing to consider stakeholder concerns and priorities can exacerbate or even create a crisis, and a key element of good governance is anticipating perception and communicating accordingly.

OpenAI’s former board learned this the hard way after abruptly announcing the dismissal of CEO Sam Altman in 2023. The board’s unclear messaging and failure to communicate effectively with employees and key investors like Microsoft stoked chaos and ultimately threatened the company’s existence. Following the announcement, OpenAI’s President and Board Member Greg Brockman resigned, Microsoft swiftly hired Altman and Brockman to lead a new AI research unit, and the majority of OpenAI’s employees threatened to quit and join the new venture at Microsoft unless all remaining board members resigned.

Days later, Altman was reinstated, and the company began assembling a new board. The execution of OpenAI’s announcement demonstrated that the board was not in touch with the interests of employees and investors and created a public spectacle and governance overhaul that was likely avoidable.

3. Ensuring a consistent organizational voice

Consistent communications from a single spokesperson prevents confusion and helps maintain credibility during times of uncertainty.  Defining spokespeople in a crisis playbook makes it easier to ensure alignment across the organization as live situations unfold.

Board directors’ past and future public statements will also be considered in the context of the organization. Directors should diligently vet what they say to the media or post online to avoid inadvertently creating risk for the organization or contradicting the company’s position on a sensitive issue.

4. Pressure-testing the crisis playbook

Make sure crisis protocols work in practice by simulating a range of crisis situations in which management and the board follow the playbook. Practicing helps companies develop muscle memory and will reveal logistical snags and oversights that can be fixed before a real-life crisis emerges. This is important because some crises develop rapidly, demand immediate action, and leave no room for delay.

Take, for example, the recent Astronomer Coldplay concert fiasco that spread globally in minutes through social media. It is open for debate whether the Gwyneth Paltrow response, clever as it may have been, helped Astronomer to course correct, but there is little debate that the company’s several-days-long delay in issuing a statement allowed the internet to define the narrative and misinformation to take hold.  Boards cannot assume that there will be time to conduct a thorough investigation or prepare a fulsome communications strategy before an issue becomes public, so it’s critical to have a practical and rehearsed response framework so that a problem can be quickly evaluated and responses come in hours, not days.

Conclusion

Board directors are uniquely positioned to provide strategic guidance and help their companies prepare for and navigate crises. The “noses in, fingers out” principle allows directors to see the big picture and maintain perspective. In most situations, boards should allow management the space to execute crisis plans and handle the response. Directors can most effectively protect their organizations if they ensure their companies have practical and pressure-tested crisis preparedness playbooks, resources (internal and external) ready to assist, and swift and impactful messaging that protects and builds stakeholder trust.

Cari Robinson is a Senior Managing Director and Amelia Fogg is a Partner at August, a strategic communications advisory firm with specialized expertise in crisis management. 

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