Crisis and reputation management
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Transcript of Crisis and reputation management
PM2: Crisis and reputation
management
Tess Woodcraft, Chair: Communications consultant,
coaching comms and Vice Chair, Rationalist Association
Siobhan Sheridan, Director of Human Resources,
NSPCC
Judith Miller, Accountant, Sayer Vincent Accountant
Rosamund McCarthy, Partner, Bates Wells Braithwaite
PM2: Crisis and
Reputation Management
Presentation by
Judith Miller, Partner, Sayer Vincent, Auditors and Advisors
Fraud • Context – size and types
• How to
• prevent it
• detect it
• respond
• Guidance
Context - size • £147m estimated total cost
• 9% respondents victims
• 70% external, 30% internal
• 47% payment/banking fraud (Source: Annual Fraud Indicator 2013)
Context • The sector is attractive
• Practice is evolving
• Internal or external
• Role of the trustee
Examples • Misuse of the charity’s bank account
• Fraudulent card transaction
• Stealing or ‘skimming off’ money from cash collections
• Fake fundraising events and requests for donations
• Thefts from charity shops
• Fake invoices
• Charities set up for improper purposes
• Fraudulently obtain grants
• Fake letters - suppliers
How to prevent it • Assess the risk
• Create the right culture
• Develop proportionate policies,
systems and controls
How to prevent it • Anti-fraud policy
• Balanced framework of controls
• Review approach regularly
How to prevent it – framework
of controls Preventative Detective
Objectives Direct controls
Planning processes Monitoring
Accountability Employee welfare and management
Training, continuous learning & competency framework
Independent review
How to detect it • Robust controls
• Whistleblowing policy
• Warning signs
• In numbers
• In behaviours
How to spot it • Unusual or unexplained items in accounting records &
reconciliations
• Missing documents or account books
• High numbers of cancelled cheques
• Common names regularly appearing as payees
• Duplicated payments/ cheques
• Payments for ‘round’ numbers to unknown recipients.
• Suppliers submitting electronic invoices in non-PDF
formats that can be altered
• Payments made to individuals/ companies with family or
business connections to trustees
• Reluctance by staff to accept assistance with finances
• Staff trying to delay work reviews or audits
How to respond • Policies & plans
• Anti-fraud policy
• Whistleblowing policy
• Fraud response plan
How to respond • Anti-fraud policy - What should it contain?
• What fraud & theft mean to the charity
• How the charity expects to deter fraud
• How it will react to actual frauds
• Key responsibilities of senior staff &
trustees
• Details of any whistleblowing plan
• How to respond to allegations of fraud, as
part of a Fraud Response Plan
• How the charity assesses exposure to
fraud risk
How to respond • Reporting to
• The police
• Charity Commission
Guidance • National Fraud Authority
• Action Fraud
• Fraud Advisory Panel
• CFG “Charity Fraud” guide
• Charities Internal Audit Network
• Charity Commission – CC8, Compliance toolkit chapter
3
• Sayer Vincent “made simple” guides – Risk
management
• Contact
• Judith Miller
• 0207 841 6360
PM2: Crisis and
Reputation Management
Presentation by
Siobhan Sheridan, Director of Human Resources, NSPCC
Experiences
• Financial services
• Government
– Defra
– Department for Work and Pensions
– Home Office
• NSPCC - employee
• Crisis at Christmas - volunteer
• Build Africa - trustee
Keeping it Simple
Crisis about people and / or crisis involving people
– Before a Crisis
– During a Crisis
– After a Crisis
Before a Crisis
• Practice – seriously
• Build big relationships
• Understand yourself
• Know your organisation
• Context is king
During a Crisis – Don’t
• Panic – easily said…
• Forget the day job
• Create further casualties
• Close out those who could help
During a Crisis - Do
• Walk in the corridors
• Focus on containment
• Communication is the crisis
• Clarity re stakeholder management
• Take decisions mindfully
• Manage confidentiality
• Maintain clear governance
• People are watching your leadership
After a Crisis
• Take time to review…with support
• Remember there may still be casualties
• Consider the impact on your
organisational culture going forward
• Reflect and learn
PM2: Crisis and
Reputation Management
Presentation by
Rosamund McCarthy, Partner, Bates Wells Braithwaite
• Governance/internal administration
– Board dispute e.g. about mission and vision
– Board and wider membership in conflict
– Board and Founding Body at loggerheads
– Unauthorised benefits
– Acting outside objects
What can cause a crisis?
• A triggering event - e.g. fraud, child protection,
terrorism, fire, flood, storm damage, which will
have governance implications
• Conduct of Board Members, CEO, Finance
Director, Chair, Patron – whether act or
omission relates to charity or another entity
What can cause a crisis?
Duties of Trustees
• Trustees must safeguard the good name,
assets, property and work of the Charity
• Trustees must asses and manage risk, which is
of utmost importance in a crisis
Crisis is a threat… and an opportunity
Aim to:-
• Pull together and come out stronger
Don’t:-
• Use the crisis to settle old scores
Is the Charity’s constitution and are its policies fit for purpose for a crisis? • Short notice for urgent Board Meetings –
virtual/by email
• Quorum
• Majority decisions out of a Board Meeting
• Conflicts of interest
• Trustee Code of Conduct?
• Removal of Trustee and/or Members
Crisis and Constitution
Investigation by Trustees (where necessary)
• Board to approve process for the
investigation
• Trustees may be allocated different roles
• Smaller group to oversee investigation
• Some Trustees sealed off to hear Appeal?
• Ultimately, responsibility for decision
making still lies with the Board as a whole
Reporting to the Charity Commission
• Which incidents should a charity report?
• When should the report be made?
• How to make a report
WHICH?
Annual Return: A charity with an income over £25,000 must, as part of the Annual Return, sign a declaration that there are no serious incidents
General rule: Charity Commission advise that you should make a report to the Charity Commission if you have reasonable grounds to suspect a serious incident
“serious incident”: any incident that has resulted or could result in a significant loss of funds or a significant risk to the charity’s property, work, beneficiaries or reputation
Examples of “serious incidents”
The Charity Commission suggests:
• Fraud and/or Theft
• Significant loss
• Significant donation from an unverified donor
• Known or suspected links to terrorism
• A disqualified person acting as a trustee
• Lack of safeguarding policy
• Abuse or mistreatment
• Criminal or regulatory investigation
Also…
• Incident reported to the police and/or other
statutory agency
• Charity or individuals subject to an
investigation by another agency
• You believe it is a serious incident
• Professional advisers advise you to report
Reports of serious incidents
2011 -2012
From Charities Back on Track 2011-2012
Concerns about charities identified
or reported from other sources
From Charities Back on Track 2011-2012
Please DO NOT Report….
• Disagreements with trustee decisions,
policies or strategies
• Complaint that the charity is delivering a
poor service
• Disputes in the way a contract is handled
• If there is no serious risk to the charity, its
assets or beneficiaries
WHEN?
General Rule: The Charity Commission say as soon as possible* and, if very serious, immediately
• Allowances will be made for the trustees gathering information and establishing facts
• Declaration on the annual return *The legal obligation is to report a serious incident in the Annual Return.
HOW?
Include the following information:
• A summary of the circumstances and details
• How it was discovered
• If there’s a relevant policy/procedure and whether it was followed
• What action has been taken to deal with the incident
Send via email: [email protected]
Multiple incidents
The Charity Commission may accept periodic, rather than individual reports
Different ways to report
Use of Information
The charity may forward the Charity
Commission a copy of a report to
another agency or an internal report
to the board.
Signposting
• Charity Commission – Reporting Serious Incidents: guidance for trustees
• Charity Commission – Risk Framework
• Charity Commission – Application for Charity Commission’s Risk Framework
Rosamund McCarthy
0207 551 7819
PM2: Crisis and
Reputation Management
Presentation by
Tess Woodcraft, Chair: Communications consultant, Chair
of Rationalist Association
Media Management in a Crisis
Protecting your Reputation
• Prevention – this is where Board plays
major role
• ‘Cure’
Prevention 1: Risk Assessment
• Risks to your reputation: What is your reputation based on? – Brand values
– What is your organisation’s credibility based on?
– Key strengths: the 4 pillars of your reputation?
– What do you uniquely contribute to your stakeholders?
• Where are you most vulnerable? What might go wrong? • People
• Places
• Services
• External factors
• Buildings
• Activities
• Money
When a crisis strikes – what is a journalist
looking for? • Reckless disregard of safety: Your failure to protect the public, eg. failure
to put in place health and safety procedures
• Lack of investment leading to accidents or poor performance
• Negligence: eg. Your failure to check the suitability or training of your operatives (eg. child abuse checks)
• Complacency: eg. failure to investigate or act on past allegations
• Bad management: Your failure to recognise a problem as a problem
• Arrogance (nb. Schadenfreude; the big machine against the little guy)
• Bureaucracy and red tape leading to failure
• Dishonesty
• Sexual impropriety
• Controversy
• Hypocrisy
Prevention 2: Risk Management
Systems to put in Place • Information: Ensure you have the information you need, and
all key people are familiar with it. EG regulatory guidance, company procedures, risk analysis reports, signposts to other data.
• Relationships: establish links external stakeholders and agencies involved in your highest risk areas (eg. police, fire service, local authority, health authority, regulator.)
• Internal communication: Ensure staff understand the importance of quality and the dangers inherent in risks, and that they know how to act if a crisis occurs.
Prevention 3: Planning ahead
• Appoint a Crisis Team
• key people
• clear roles
• train them
• Keep up-to-date names, contact numbers, etc. for the team
• Procedures and information needed by crisis team • Process for initiating a meeting
• Chart with flow of information (who should be kept in the loop?)
• Up-to-date press lists
• List of key stakeholders and agencies and contact details
• List of basic questions they will need to answer – Where did it happen
– When
– Why
– Who is involved
– What are you doing about it?
If a Crisis Hits......
• Don’t make statement until you have facts
• Call together crisis team
• Get information
• Decide ‘line’
• 1 spokesperson (until it becomes clear you have to
move up a gear)
In a Crisis – put a CAP on it!
• C Concern 50%
• A Action taken 40%
• P Perspective (your excuses) 10%