TO: Ms. Manager
FROM: Mr. Magoo
DATE: June 24, 2013
SUBJECT: CFO/SEC Crisis Management
CC: Crisis Team
In response to the current crisis regarding the resignation of Mr. Shady and the impending SEC investigation, we need to focus on correcting the situation and restoring credibility. Despite our lack of information, we must assure interested parties including stakeholders, customers, and employees of our intended actions and our continued operations. As part of the crisis management team, we should be aware of our legal requirements, ethical considerations, and public communications.
As a publicly traded company, we have a legal obligation and a responsibility to our stakeholders to disclose material information or knowledge that may affect our stock market price to the appropriate parties (Seitel, 2011). The SEC requires material announcements to be widely distributed and the Sarbanes-Oxley act requires this information to be included in our financial statements (Seitel, 2011). The resignation of our CFO requires us to make a public announcement within 24 hours as this information may affect our stock (Seitel, 2011).
After many years of building our organization’s credibility, we do not want this situation to affect negatively the public’s opinion of our company. Continuing to keep our positive corporate image is extremely important. We need to take every measure possible to maintain this representation while upholding our ethical standards and performing our legal responsibilities.
The value of public communication in this situation is essential. We should create a press release immediately to dissuade any rumors of inappropriate behavior by our organization and calm the public (Seitel, 2011). Our steps to alerting the public should be to define the risks, describe our actions to reduce the risk, name the cause of the risk, display management action, and create a consistent message (Seitel, 2011). Additionally, we will need to convey a clear message and not speculate on information we do not know (Seitel, 2011). We do know that Mr. Shady has…