Grand Childrens' Park, Seoul

I was walking around Seoul the other day and noticed the cherry blossoms in full bloom.  Usually I am too busy to really notice, but on that particular occasion I took the time to appreciate the cherry blossoms.  I vowed to remember how beautiful the trees were as well as the park I walked by.  Sometimes, when we are too busy we fail to remember the little things that make life magical.

From a risk management standpoint, sometimes we get caught up in the moment and fail to remember the processes and procedures that were put in place by our predecessors or colleagues to ensure that the corporate strategy of the company is properly implemented.  And, of course sometimes, during a major crisis we are so busy that we fail to remember to follow or implement those processes that have been created just for that occasion.   Many companies have in fact created processes to implement a crisis management strategy, but then go about business never remembering to actually test the crisis management strategy or simulate a crisis to determine the viability of the strategy that has been developed.  Maybe the processes or policies were just filed away in a filing cabinet with no one remembering such polcies even existed.

Does the crisis management strategy work?

Has it been tested?

Did anyone remember to run crisis scenarios with management involved?

If your company has already created  a list of risks that it may face in a crisis scenario with plans to address them, has anyone remembered to fully vet them.  A company and its management will be under a great deal of pressure once a crisis occurs- remembering to implement the crisis management team that was created in the past or remembering to implement the crisis communication protocols that were discussed last year may not only help prepare management for such a pressure filled situation but will help prepare the company to properly manage the crisis.

Companies that successfully manage crises have used four or five basic steps to prepare for a crisis to the extent possible. They include the following steps:

1. Identify the major areas of vulnerability the company faces.
2. Develop a plan for dealing with potential threats.
3. Form a crisis management team to deal with or handle threats.
4. Simulate crisis scenarios of potential threats to prepare the company.
5. Learn from the experience of managing the crisis.

Other companies have used a variety of steps to handle crises, including:

1. Avoiding the crisis through proactive steps
2. Preparing for the crisis through preparation and planning
3. Properly reacting as soon as the crisis exists, and
4. Resolving the crisis

Notice that successful management of crisis usually involves preparing for a crisis through preparation or planning, avoiding the crisis through proactive steps and learning from the experience of managing a crisis.  All of these steps require remembering what has been done in the past whether successful or not, acting proactively or using processes that have already been planned or implemented.

When facing a crisis today, many companies are suffering from the employee turnover caused by the 2008-2009 financial crash. It may have impacted a company’s ability to handle a crisis.  The risk management institutional memory may have been reduced or in extreme cases no longer exist.  With layoffs happening today, maybe policies develped 5 years ago have been forgotten.  What risk managers and in house counsel (or management) must do today to circumvent the negative impacts of a crisis is to remember what was done in the past.  What worked- use.  What didn’t work- don’t repeat! If a crisis management plan was created- use it or at least re-examine it. Use what was implemented if possible.  Under a high pressure situation dont try and re-invent the wheel.

In other words, a company’s risk management department must not only remember if crisis management policies exist but also to remeber to use them or at least re-examine them.  In other words, risk management or legal must remember to remember!

Closed business

Crisis Management- What is Your Communications Plan?

In the past I have commented on crisis management and the tools needed to handle such crisis in today’s business environment. Failure to properly handle a crisis may lead to the business closing its doors as in the picture to the left.  Of course what companies are finding out is that international crisis are harder to handle than domestic ones.  Why? In today’s world, many companies do business internationally. (more…)

For those of you who engage in international business, everyone knows that international negotiations are much more complex than domestic negotiations by the fact they  involve different languages, different cultures and perhaps different views of the world.  Culture will determine how companies or organizations and their negotiators look at or perceive negotiations.  (more…)

Take a hands on approach to litigation........I once worked for a company that prior to my joining had a policy of not managing the outside lawyers it used during trial. Its philosophy was that once the law firm or lawyer was conducting the trial, the law firm knew best what to do and what resources to use in order to achieve a successful outcome. What the company failed to realize was that its perception of a successful outcome was different than the law firm it retained to handle the trial. (more…)

Dawn Raids can be stressful…… In Korea, as in other countries, competition or anti-trust authorities are very active.  In fact, Korea’ s competition authority- the Korean Fair Trade Commission ( “KFTC”) has become more aggressive during the last few years than it used to be.  In order for companies to manage the legal risk of an anti-trust investigation, such as in Korea, the managers of companies that are potential targets should know how to handle themselves during a “Dawn Raid”.  A Dawn Raid is when competition authorities show up at the office or offices of a targeted company and seek to look at or take documents that are relevant to the investigation.  Even of course computers, etc.  Office managers or factory managers need to be prepared to handle Dawn Raids as so should in-house counsel.

What should you or your employees do in case of a “Dawn Raid”?  Here are a few tips in case you are the subject of a Dawn Raid in Korea by the KFTC:

On the arrival of officials from the KFTC

1.   What you should do

• Ask the officials whom they wish to see and what purpose the visit is
• Ask the officials how many there are ( or will be) in their group
• Take the officials to a meeting room and ask them to wait.  Do not leave them near documents.
• Tell the officials that you will inform someone who is able to deal with their enquiries
• Immediately contact the law department, your external lawyers and Upper Management

2.   You should then:

• Ask the officials to wait for the arrival of a lawyer- however you should note that the KFTC   officials are entitles to directly start the enquiry
• Ask the officials to identify themselves
• Ask the officials for their mandate for conducting their investigation  and make a copy of it
• Fax a copy or email one copy to your lawyers or to Upper Management

3.  Don’t

• Destroy or conceal any documents
• Restrain the officials physically from entering the offices
• Leave the officials alone except in a meeting room which is void of any documents
• Enter into a conversation with the officials beyond pleasantries

During the investigation

1.  Don’t

• Be hostile or obstruct the investigation
• Be too compliant. Remember that the investigators’ powers are limited
• Volunteer documents or information that has not been requested
• Leave investigators unsupervised

2.  Do

• Ensure that each investigator is accompanies at all times
• Ensure that you keep a copy of all paper or electronic documents copies or seized by the investigator (s)
• Keep full notes of everything that happens – where did the investigators go, who did they talk to , what questions they asked and what the answers were, etc.
• Report to the lawyers and /or Upper Management after the interview with the investigators

Though Dawn Raids maybe very stressful, it is important to be courteous as well as cautious.   Remember, this maybe the first step in an anti-trust investigation, but it is a key step and should be handled in a very professional manner.

Do You Comply With The FCPA?---  South Korea has recently updated its anti-corruption laws in an effort to become compliant with the OECD Anti-Bribery Convention passed last year.  The new updates close loopholes that allowed public officials to accept expensive gifts without threat of criminal prosecution.  (more…)