Magazine article Risk Management

Crisis Management Series: Creating Crisis Management Teams

Magazine article Risk Management

Crisis Management Series: Creating Crisis Management Teams

Article excerpt

This month's article focuses on the members of the team that deals with crises, from preparation to aftermath.

Next month:

The technological tools to manage a crisis.

Every crisis management program begins with a competent crisis management team. This group serves as the organizational backbone for crisis planning and response. The team is composed of several key figures, each with specific duties before, during and after a crisis.

Team Leader

The team should be headed by the organization's chairman or another senior executive authorized to make binding decisions on behalf of the organization. This individual must have the confidence of the board of directors and the majority of the shareholders. He or she is the central figure of the contingency management plan and will make the critical choices during execution. The team leader must be willing to make-and enforce-- these difficult decisions.

Precrisis: As the team's central figure, the leader exercises final decision-making authority. He or she determines and plans the policy and assembles the rest of the team.

During: The leader makes critical decisions relevant to executing the program. The team leader should be one of few team members, if not the only member, with discretionary authority. In a crisis, too many decision makers may frustrate carefully laid plans.

Postcrisis: Again, the team leader is responsible for decision and policy making. In postcrisis situations, he or she works closely with the board to direct the organization.

Finance Director

Typically the CFO, the team's financial representative is responsible for handling all financial affairs related to crisis management.

Precrisis: The finance director assesses financial implications of each aspect of the program, arranging for rapid disbursement of emergency funds from trusted creditors.

During: The finance director handles all financial transfers related to the crisis, such as paying ransom money in a kidnapping.

Postcrisis: The finance director maintains detailed records of costs related to crisis management and continues to advise the team leader on the financial impact of the crisis.

Legal Representative

The team's legal representative can be outside counsel or the organization's general counsel.

Precrisis, during and postcrisis: The legal representative examines the legal implications of any action taken by the crisis management team.

Security Director

The security director handles contingency planning, crisis response and information management through all phases of the crisis.

Precrisis: The security director is in charge of developing the contingency management program. He or she is responsible for establishing a crisis center and training employees in proper crisis response.

During: The security officer serves as the primary information officer. He or she notifies other members of the team about the nature of the crisis and continues to supplement reports as events unfold. This director is the primary liaison with police and other safety officers.

Postcrisis: The security director's primary postcrisis assignment involves coordinating the evaluation and modification of the program.

Risk Manager

The risk manager assesses the potential impact of a crisis, secures adequate financial protection against that impact and helps with information management.

Precrisis: The risk manager acquires adequate insurance for continuing critical operations and determines how various contingencies affect coverage. He or she advises the team leader on the potential financial impact of these effects.

During: The risk manager assists the security director as a secondary intelligence and information officer.

Postcrisis: The risk manager prepares insurance claims and modifies organizational policies as needed. …

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