Mayhall Fondren Blaize

Evolving business law principles may prevent major crises

Handling crisis situations is becoming an expected mode of operations for most business entities. Lessons can be learned from observing how some of the largest companies handled major crisis situations in the recent past. In many cases, their response was less than helpful, and resulted in fueling the flames of the crisis rather than putting the events to a gradual but definitive end. Evolving business law principles in Louisiana and nationwide give some clues on how to best handle a crisis and preventing it from becoming a full-blown catastrophe.

What allows a minor crisis to escalate into a major public relations disaster? Experts believe that the lack of a prepared response is the main cause that fuels a runaway spiral of bad press after the report of a problematic event has surfaced. They also believe that the critical time to act properly is in the first few days after the events are revealed.

The problem brings to mind some of the large public relations disasters encountered by some major companies in the past few years, such the events faced by Target, Sony, and Equifax. These were major data breaches that put the personal information of tens of millions of consumers at risk. Legal issues were perplexing and pressing to consumers.

As bad as that sounds, if corporate executives had been prepared with intelligent, truthful explanations, their corporate image would not have suffered in the public's eye nearly as badly as did occur. Experts assert that there are technological tools and programs that can be set in place to respond to such crises. They suggest that the leadership of the company must plan ahead and anticipate how to handle the specific factual variations that may occur.

This is not to suggest that glib answers and casual story lines will save the day. Leadership must sometimes admit a mistake, and where the company has failed in its mission, accepting responsibility right at the inception of the events may well be effective in saving the company's public persona. Companies in Louisiana and elsewhere would do well to also consult with technologically savvy business law firms for assistance where the legal issues that arise are substantial and important.

Source: entrepreneur.com, "The Crisis Won't Kill Your Business If You Get the Response Right", James F. Haggerty, Dec. 4, 2017

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