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Ethical misconduct disaster with your President and CEO: arrested and charged

As you and the guests arise from your tables, you are startled when your cellular phone begins vibrating with an incoming call. You excuse yourself and step into a quiet alcove in the hallway to take the call. You discover that your President/CEO has been arrested and charged with driving under the influence, possession of a controlled substance, soliciting prostitution, and resisting arrest. As you hang-up from the call, you feel a tug at your arm as the Senator's aid requests your immediate attendance at a private gathering of significant donors in the Senator's executive suite.

Assumptions:
The Company has no business continuity plan or process for dealing with ethical misconduct disasters
· The Company only has outside legal counsel
· Prior to this alleged event, the President/CEO has
been a "straight arrow"
· The news media regularly follows and reports from the police blotter
· You are an experienced public affairs officer; this is not your "first rodeo"
Assume the role of the company's public relations officer and determine in detail what should be done to mitigate this ethical misconduct disaster.
·

1) What should be the immediate action or reaction?
· At approximately midnight, the public relations officer has been contacted by a representative from the local news media asking for a comment for the morning paper and television news network.

2) What if any comment or information should be given? I would not give a comment until I knew the whole story for legal issues could arise.

· The next morning the public relations officer arrives at work to a stack of phone messages and people lined up waiting to see him/her.
3) How should he/she handle the situation internally? Employees? Shareholders? Union officials? The Board of Directors? Internal audit? The President/CEO's wife? Etc. The best way for any company to handle public relations nightmares is to deal with the situation honestly, present the facts, and state their plan for correcting the problem. Most importantly, take responsibility.

4) How should you handle the situation externally? Analysts? Shareholders? Press release? If so, what should it say?

5) Discuss the pros and cons of remaining silent and taking no action.

6) What role, if any, is there for outside legal counsel? The corporation would probably not need legal counsel thus far. Possibility in the future.

7)Explain who is responsible for the ongoing operation of the business.
Vice President of the company would be responsible until shareholders appoint someone else to perform CEO responsibilities.

Solution Preview

QUESTIONS:
As you and the guests arise from your tables, you are startled when your cellular phone begins vibrating with an incoming call. You excuse yourself and step into a quiet alcove in the hallway to take the call. You discover that your President/CEO has been arrested and charged with driving under the influence, possession of a controlled substance, soliciting prostitution, and resisting arrest. As you hang-up from the call, you feel a tug at your arm as the Senator's aid requests your immediate attendance at a private gathering of significant donors in the Senator's executive suite.

Assumptions:
The Company has no business continuity plan or process for dealing with ethical misconduct disasters
? The Company only has outside legal counsel
? Prior to this alleged event, the President/CEO has been a "straight arrow"
? The news media regularly follows and reports from the police blotter
? You are an experienced public affairs officer; this is not your "first rodeo"
Assume the role of the company's public relations officer and determine in detail what should be done to mitigate this ethical misconduct disaster.

1) What should be the immediate action or reaction?
The immediate action should be to get in touch with the company's outside legal counsel to fully advised them of the details and to ask them how the company (and the public relations officer) should respond. If applicable, other members of high "upper" management should be notified and no one else; there should be no other assumptions or reactions; we do not even know if the allegations are true, and even if they are, it should NOT affect the "company" only the ...

Solution Summary

The 800-word, cited solution presents a good narrative statement in response to all the questions in the problem. Conclusions are stated.

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