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Panelists:Dave Arick, ARM
Assistant Treasurer, Global Risk Management - InternationalPaper Company
David Smith
Vice President - Risk Management Family Dollar Stores
Robert Peterson, ARM, ALCM
Executive Vice President, National Client Development - SedgwickSession CLM204
Tuesday, April 17, 20122:15 p.m. - 3:30 p.m.
Welcome to RIMS 2012 Annual Conference & Exhibition
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Crisis ManagementStrategies
SedgwickBob Peterson
Executive Vice President, National Client DevelopmentSedgwick
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Despite best efforts, large losses are certainties
throughout a risk professionals career. A well-written, well-executed crisis management plan can
mean the difference between an organizationssurvival and demise. Exposures must be addressed
in preplanning discussions along with post crisisstrategies that include corporate communicationsand media relations as part of recovery to protect
the intangible assets of brand and reputation. Learnthe key elements of a crisis management plan,
steps to effective execution and how to maintainand restore confidence in your business in the
aftermath.
Introduction and Overview
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What is Crisis Management?
Also referred to as.
Crisis:Any situation that isthreatening or could threatento harm people or property,seriously interrupt business,damage reputation and/ornegatively impact share
value.
Disaster recovery
Business continuity planning
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Top 10 Crises of 2011
TepcoNaturaldisaster
NetflixChange inbusiness
model
DowChemical
Olympic
sponsorship
ECBEurozone
crisis
NewsCorpPhone
hackingscandal
PennState
Misconduct
allegations
Blackberry
Major outage
SonyData breach
HPChange in
board
members
QantasLabor dispute
http://www.holmesreport.com
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Summary
Predictable andquantifiable
events
Unexpected andunwelcome
events
Plan for
Minimize theimpact
Resume normaloperations
Ultimategoal
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Questions to Ask
What are theworst things
that canhappen to
my
organization?
What can weprevent?
What are wewilling to doto prevent
theevent/incide
nt?
Can weafford the
risk?
How will wedeal with it?
What is thereporting
andcommunication processduring the
crisis?
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Common Mistakes
Inadequateplanning
Failure to
bring thebusiness intothe planningand testing
of yourrecoveryefforts
Failure togain supportfrom senior-
level
managers
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3 Keys to Crisis Communications
Hon
estyLet everyone on
your team know
that your integrity
is the most
valuable
commodity you
have in a crisis and
it must not be
compromised.
Sp
eed
The dynamics of a
crisis can change
based on external
events. Once
identified, empower
your team to make
the tactical
decisions required
to communicate
events as they
unfold.
Ima
ges
People believe what
they see over what
they hear. You can
have great talking
points and a great
spokesperson
destroyed because
the words are out
of sync with the
images coming
from the scene.
http://signalbridge.blogspot.com/2011/07/3-keys-to-crisis-comms-in-digital-ag
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Crisis ManagementStrategies
International PaperDave Arick, ARM
Assistant Treasurer, Global Risk Management
International Paper Company
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Global leader in paper andpackaging
$30 billion in 2011 sales
70,000 employees in 24+ countries Manufacturing locations (excludes
JVs)
39 pulp, paper and packaging mills
300+ converting, packaging andrecycling plants
200+ distribution branches
Includes Temple-Inland, acquired February 2
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Manmade incidents, likefires & explosions
Natural disasters, likehurricanes
Crises Come in Many Varieties
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A Historical View of Crisis ManagementEfforts
FM Global
recommendations(flood, hurricane,fire brigades,emergency
response, etc.)
Telephone hotlineto corporate staff
personnel
Facility-based
Risk management
Environment,health & safety
Unevencorporate
involvement,awareness
Informationtechnology
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Developing Management Support
Executive offices
relocating toMemphis
Concerns raisedpost-Katrina:
what if Memphis
has the BIGONE (i.e., a
majorearthquake)?
Whatpreparationshave been
made? What isneeded? How iscapital allocated
for this?
Eventual outcome: BCP department
December 2005 Meeting
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Crisis Management Timeline
General Management of the Organization
The Crisis Management Process
AfterCrisis/EventPre-Event
Risk management
Risk assessment
Loss prevention
Mitigation planningDeveloping responsive,comprehensiveinsurance program
Communicating risk issues
Business continuity plans
Developing plans
Testing plans
Revising/updating
plans
Training personnel
Incident management
Incident response
Communications
Insurance recovery
Activating and executing plansMitigationBusiness resumptionBusiness recovery
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Company Resources/Functions
InformationTechnology
Security
LegalEnvironment,
Health& Safety
OperationsFinance &
Accounting
TEAM
HR/Communications(incl. public affairs)
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Risk Managements Role in CrisisManagement
Focus ondriving lossprevention,
facilityresponse plans,and risk-based
decisions
ComplementBCP
department
efforts
Insurer and brokerresources
Regular discussionsand moral
support
Ensure thatcompanyinsurance
programsevolve as IPsunderstanding
of possiblescenarios
evolves -understandcoverage
if/when itsneeded!
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Some Closing Thoughts
support
guidance
on-going
Seniormanagement support iscritical
Plenty ofexternalguidance if noin-houseexpert
The work isnt donewhen the plans are!
Regular exercises totest plans and currentthinking, with plansupdated as new
learnings surface Sustain mode - mustkeep plans updated asthe company evolves,and teams must stayactive/current
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Crisis ManagementStrategies
Family Dollar storesDavid Smith
Vice President, Risk ManagementFamily Dollar Stores
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Charlotte, NC based Family Dollar stores offerquality merchandise at everyday low prices, ineasy to shop neighborhood locations.
53 years in business A Fortune 300 company
7,200 stores Small Box
2 to 4 team members staff the stores
Growth: 1 new store every 25 hours
More than 850 million customers per year
11 distribution centers 45 states 50,000 Team Members
Annual sales in excess of $8.5 billion
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The Awakening......
for those of us who lived through these events, the only
marker well ever need is the tick of a clock at the 46th minute ofthe eighth hour of the 11th day
President George W. Bush
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Family Dollars Approach Since 9-11-01
The Windstorm
Phases: Pre - Katrina Ike (Katrina to
Irene) Irene & Forward
People CentricCommunications
CrossFunctional/Global
EvolutionaryExperience
Based
Risk Management
Enterprise RiskManagement
Infiltration
Initially IT
CentricReactionary
Natural DisasterSr.
Management ?
Store Operations
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Katrina to Irene (Ike)
Interdepartmental
Multi-disciplined
Proactive/Loss Avoidance
Proactive Reactivity
People Centric
Safety
Compassionate/supportive Communications
Business continuity plan in placeand practiced
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Communications is Critical
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Irene & Forward
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Communications
Pre-Event Regular internal meetings Monitoring Warning protocols Direction Staging
Equipment Personnel
Safety Insurance carrier TPA Corporate
communications
Hurricane Irene Stores Strike Zone Mapping
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Communications Post Event
DamageAssessment
Deployment Equipment Personnel Supplies
Safety
CrisisCounseling
Communications
Team membersupport
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Success Drives Credibility
People
Global Trade disruption
Financial
Cyber
Informationtechnology
ERM Natural Disasters & Beyond
West Liberty, KY,
March, 2012
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Questions?
Session CLM204Tuesday, April 17, 20122:15 p.m. - 3:30 p.m.
Welcome to RIMS 2012 Annual Conference & Exhibition