Media Relations during Corporate Crises By Michael Breen Swiss-Korean Business Council Thursday January 23, 2014 Grand Ambassador Hotel, Seoul

The excitement of a crisis Nothing is more exciting than a crisis, provided it is not happening to you Crises can come in all kinds of ways. Some creep up on us, and others come without warning.

Types of crisis Issue A development or potential development that could escalate into a crisis if mishandled An unexpected event, usually of a physical nature, that may or may not temporarily halt business, but that could escalate into a crisis if mishandled Something that seriously threatens the ability of the business to continue Crisis Emergency

IssueEmergencyCrisis Categories of event Labor unrest Boycott of products Withdrawal of sponsorships Withdrawal of government support Sudden draconian regulation An Emergency or Issue mishandled Raid on the company office by prosecutors or National Tax Service Extortion Terrorist Attack Kidnapping Facility fire or explosion Labor strife North Korea rhetorical threats North Korea military action/nuclear test Consumer complaints Boycott threat Malicious rumor New legislation Policy change with new government Worsening economic downturn Threatened protests by NGOs Confidential data loss Labor unrest Bribery Sexual harassment Tax avoidance Criminal acts (assaults, homicide, etc.) Accidents (car/flight/ship accidents) Copyright infringement Information sabotage

The failure to react For many organizations, the instinctive reaction is to say as little as possible and allow the issue to subside. Why is this?

Why companies hesitate to communicate in a crisis Business is about control of risk and the reason crises terrify companies is because they appear to take this control out of their hands It is therefore natural to want to say as little as possible Unfortunately, this tactic rarely if ever succeeds It serves only to allow other voices to fill the void left by a lack of information

Controlled communications Clear messaging Openness to media Local voice Direct communication with stakeholders Avoiding the “blame” game Filling the void How companies should react: Principles of crisis communications

The importance of social media With the convergence of traditional media, search engine use and social media in the event of a crisis, it is critical to establish an “online voice of authority” Emerging trends in today’s digital crisis management 1.Everything happens at lightning speed 2.Every crisis is global, social and viral 3.Media, key stakeholders and the general public demand ‘hyper-transparency’ 4.Tone and method of dialogue is as important as message delivery 5.Detractors have the same tools 6.One-way messaging doesn’t work online because people want dialogue. Inviting key stakeholders into a conversation is most effective.

The media in a crisis Journalists love crises. When you consider that news is the interruption of the normal flow of events, a crisis is the very definition of the best kind of news story.

Dealing with Media Two types of company in crisis: Lone Star Funds Hanvit Bank The big difference between these two was not that one was foreign and one was Korean. It was that Lone Star Funds ignored the media (until it was too late) and Hanvit Bank paid off the media.

What to do and what not to do in a crisis DoDon’t Consider our long-term reputation over the short-term discomfort of handling aggressive questions Collect all necessary information as soon as possible Be honest. Tell the truth Be brief and concise Be polite, sincere and patient Show sympathy and concern for people Announce the circumstances of any accident or incident (“emergency”) as soon as possible Be cooperative with media, government authorities, and relevant organizations Show the media the company is cooperating and willing to solve problems Be willing to follow-up with information requests Know the identity of reporters and others asking for information and comments Do not hide Do not lie Do not speculate. Do not be drawn to make comments on what is uncertain and hypothetical Do not give personal opinions or assumptions Do not give out lists of victims Do not be rude, arrogant or dismissive Do not cover camera lenses or show any defensive action Do not give off-the-record information Do not talk about compensation Do not blame others Do not pretend the situation is better than it really is

Thank You