Take the case of China Life Insurance. After an extraordinarily successful initial public offering on the New York Stock Exchange, the company found itself at the centre of a very unpleasant, very American experience. Maybe even worse from a reputational standpoint than the multiple investigations by regulators, it is becoming a poster child for Chinese companies not yet ready to fully participate in Western capital markets.
From failing to alert potential investors to a wide-ranging accounting investigation by two powerful Chinese Government agencies, to self-serving hyperbole that would have made an American dotcom company blush, China Life was ill-prepared for a confrontation with the American media. But confrontation is just what it got, along with falling stock prices. Publicly-traded Chinese companies need expert counsel on what the law doesn't require.
They must have counsellors wise enough to balance the equally crucial perspectives of law and public relations. They must be ready to take the immediate and longer-term steps required. A crisis management team must be created - including representatives from in-house counsel, your outside law firm, the head of human resources, and the head of the business units directly involved, along with your in-house publicity team and your outside PR firm.
Prepare three to four brief message points that offer a clear, concise statement of your company's position - and, if possible, innocence - and that, at the very least, affirm your cooperation with the investigating authorities. Keep them as on-point as possible. The more explaining you do, the fewer opinions you sway.
Announce concrete steps your company is taking to protect consumers, stockholders, and employees. Message points without action to back them up are simply not credible to the news media.
Determine who the crisis team spokespersons are. Media-train them. Include videotaped role-plays in the training. Consider a special hotline to handle inquiries from investors, consumers, employees, and other concerned parties.
Your company's website should also offer up-to-date information about the crisis. Consider third-party supporters; these are often well-respected community figures who can tip the scales in the favour of a corporate client.
There are always three primary roles - villain, victim, and vindicator.
By putting in place a proactive communications plan, in-house and outside counsel can ensure that clients will not, like China Life, tumble into the role of media 'villain'.