Crises

What do you do in a crisis?

Organizations occasionally face crises and must make decisions very quickly. These can be:

• Legal e.g. a key person is accused of something illegal, the deadline for lodgment of key documents is overdue, etc.
• Publicity e.g. threat of a major negative publicity action
• Personnel e.g. a key person suddenly leaves the organization through sudden illness
• Financial e.g. exposure to major debt

Failure to make a corrective decision could lead to serious detriment to the organization and sometimes even to its complete collapse. That is, the CEO must decide Should I make a decision to do something that is not authorized by the Board?, or Should I go with the current Board decisions and watch the organization collapse?

Someone needs to make a decision quickly enough to protect the organization. Ultimately, the Board could be liable for negligence if nobody acted appropriately to protect the interests of members or shareholders, even if you cannot have a fully legal board meeting.

The best alternative is for the Board to have a general crisis management policy in place so that the CEO and Board can make a sound decision very quickly. If you don't have a crisis management policy and have no time, the CEO should confer with the Chairperson of the Board, and together:

• make a decision and act immediately
• inform the Board immediately of the circumstances, the decision, and the reasons for it,
• suggest the follow-up action that the Board must take, and
• allay any fears and concerns the Board members might have.

If you have time, there are several other options:

• An emergency meeting of the board, but there may be no time to make it official, especially if the constitution requires written invitations and/or a period of notice beforehand.
• An emergency meeting of the executive committee (if you have one).
• A meeting by circulation.

Even so, the Board should ask questions at its next meeting:

1. Did the crisis arise from a risk that could not have been anticipated?
2. Did the crisis arise from a management style that lunged from one short-term crisis to another?
3. Were knee-jerk panic reactions a factor in the response?
4. What did we learn?
5. What changes need to be made? Specifically, what will our emergency management policy be?