What should you do when your organisation is hit with a corporate scandal? Don’t run and hide, writes ACLA CEO Trish Hyde.

A corporate scandal can headline national news. An accusation of harassment or bullying, alleged misappropriation of funds, or claims of corporate greed can lead to communities or individuals being harmed.

Regardless of guilt or innocence, once the story hits the news the matter is already being heard in the court of public opinion. Unfortunately, this court cares little for due process.

It has a competitive imperative to be first with the news; it cares little for examination of the facts (sensational headlines sell papers); and it is not big on balance – for every person who issues ‘no comment’ there are 10 critics happy to provide their opinion.

For the in-house legal department, this does not mean you should run and hide the moment a corporate scandal hits your organisation. In fact, in-house counsel have a valuable role to play – one that can help save the organisation’s reputation.

The first step is being able to understand the media. Corporate media specialist, Doug Wellar, provides these
valuable insights:

• Know that whether it’s print, radio, television or online, the media is a business with a job to do.
• Media outlets are competitive. The driving force behind every journalist is to get the scoop or that exclusive story.
• The media can play a valuable role in defining your organisation’s reputation. Equally, however, the media can be destructive and decimate your organisation’s reputation.
• Journalists are under extreme pressure to get the story. They are often rushed, may be suspicious and are always
chasing the ‘wow’ factor.

The second step for in-house counsel is to understand what types of stories create public outrage and gain widespread media coverage.

Author and risk communications expert, Peter Sandman, says the following factors drive public outrage:

1. Was coercion involved?
2. Is it industry-based (as opposed to a freak of nature)?
3. Is it unfamiliar/exotic?
4. Is it memorable?
5. Is it dreaded?
6. Is it an emergency, as opposed to something we have
lived with for a while?
7. Was it not knowable?
8. Was it out of the control of the community?
9. Is the process not responsive?
10. Was it done by someone unknown or not trusted?

The third step for in-house counsel is to be prepared. Corporate scandals don’t usually happen overnight and in-house counsel should proactively manage the risk. They should be actively engaging with the communications manager, assessing legal matters based on the above factors and using this to proactively seek out potential issues.

And lastly, don’t forget the golden rule – without art, even the most salacious stories struggle in today’s visuallydominated media!

Trish Hyde is the CEO of the Australian Corporate Lawyers Association, the professional body for in-house lawyers.