What the GC Needs to Do First in a Crisis

This article is part two of a four-part series providing practical advice for general counsel directly from pros in the field.

How the GC initially reacts to a substantial crisis is one of the most important tests of any in-house counsel. I asked for tips and insights from highly experienced legal heads of multinational companies:

• Richard Bennett, former group general counsel (retired December 2012), HSBC Bank plc, London
• Sabine Chalmers, chief legal and corporate affairs officer, Anheuser-Busch InBev, New York
• Dan Fitz, general counsel, British Telecom Group, London
• Peter Herbel, general counsel, Total S.A., Paris
• Massimo Mantovani, general counsel, Eni S.p.A., Rome
• Michael O'Neill, general counsel, Canadian Helicopter Corp., Vancouver

Sink or swim—What to do first

Sabine Chalmers: “How a company reacts to a crisis is just as critical to how it is ultimately judged by stakeholders as having been responsible for creating the crisis in the first place. I do believe that companies that are seen to be doing the right things stand a much better chance of coming out with their reputations intact at the other end.”

Massimo Mantovani: “Today’s GC is much more active and involved when there is an investigation or inquiry. He or she is in an operative role. The board wants you to be involved in all aspects—they count on you to clarify the issues as they evolve. It is extremely demanding of your time, so deputies must be relied on to manage day-to-day legal services.”

Peter Herbel: “A general counsel in a first experience dealing with regulators in a tense situation (or any other crisis) must stay calm and use legal logic—but don’t stop at legal. It’s important to recognize the social, political, and psychological implications of a crisis to get a clear picture of how best to respond.”

These general counsel refer to consistent methods from the moment a government inquiry begins:

• Identify a working group.
• Separate that group from others in the company.
• Establish clear lines of communication.
• Delegate tasks to others for those fully engaged in the working group.