The Institute for Crisis Management expanded its
news tracking research database for 2016, tracking
more than six hundred thousand crisis stories in
the news world-wide. We broadened our review
of the news in 2016 with more media outlets and
adjusted to account for some extraordinary occur-
rences in highly-charged environments across the
globe. Some crisis trends remained consistent year
over year, while others grew from spikes in some
categories in politically charged election-year cli-
mates such as the United States and Europe.
Discrimination and workplace violence led dis-
turbing trends for the year, with discrimination
stories showing a four-fold increase over 2015 and
stories of workplace violence spiking, in part due to
several mass casualty events attributed to terror-
related activities. ICM included its study stories of
terror attacks in places like Orlando, Florida, Nice,
France and Brussels, Belgium because of heavy
media coverage and the impact on the businesses,
churches and organizations where the attacks took
place.
Cybercrime and data breaches continued to
make headlines in 2016, with a reported breach
increase of 25% in the U.S. alone. There were 15
major work stoppages in the U.S. involving 99,000
workers. U.S. restaurant chain Chipotle continued
to struggle to recover from its 2015 food safety
crisis when the company’s head of marketing was
indicted on drug charges and its co-CEO was oust-
ed. The so-called Panama Papers took the world
by surprise when 11.5 million leaked documents
were released, leading to significant embarrass-
ment and questions by law enforcement officials.
Politics ruled the headlines and the airwaves with
the UK’s surprise “Brexit” vote and a contentious
presidential election in the U.S. Popular food
brands including Dole, Pilgrim’s Pride and Kellogg
recalled best-selling foods due to potential con-
tamination issues. Hoverboards, the “it” toy of the
2015 holiday season, were quickly recalled due to
fire hazards from lithium ion batteries. Samsung
suffered a double-whammy when its Note 7
phones were pulled from the market due to ex-
ploding batteries, followed by a recall of 2.8 million
malfunctioning washing machines.
A toddler vacationing with his parents at Walt
Disney World in Florida died when he was attacked
by an alligator in one of the resort’s many man-
made lagoons. Concerns about the
Zika virus kept many people home
last summer, including some
Olympians who chose not to par-
ticipate in the Brazil summer
games due to the threat.
Volkswagen pleaded guilty to criminal charges
related to its diesel-emissions scandal, and Takata
recalled 34 million auto airbags. Embattled retailer
American Apparel filed for Chapter 11 bankruptcy
protection. Pharmaceutical companies found
themselves in a glaring spotlight in several cases
ICM ANNUAL CRISIS REPORT GLOBAL NEWS COVERAGE OF BUSINESS CRISES IN 2016
Issued April 2017
ICM DEFINITION of a
BUSINESS CRISIS
Any issue, problem or disruption which
triggers negative stakeholder reactions that
can impact the organization’s reputation,
business and financial strength
TYPES OF BUSINESS CRISES
Sudden Perceptual Smoldering Bizarre
© 2017 Institute for Crisis Management. All Rights Reserved
®
where they were unable to defend huge price
increases on popular drugs like the Epi-Pen. Au-
tomakers again set a record with more than 53
million vehicle recalls in 2016, up from a previ-
ous record 51 million in 2015.
Natural disasters claimed 8,250 lives, less than
half the 2015 death toll. Just 271 lives were lost
in plane crashes in 2016, a significant decrease
from the previous year. In its worst rail disaster
since 1999, 150 people died and another 150
were injured in a November train derailment
near Kanpur, India.
Mismanagement
Largely because it is the category that consist-
ently generates the most news stories, ICM re-
ceives many questions about how we define mis-
management. Our research in this category in-
cludes stories that involve topics like profession-
al malpractice, misappropriation of resources,
misconduct, negligence, collusion and unethical
or questionable practices that lead to adverse
impact on organizations.
In 2016, Mismanagement accounted for 29.2%
Most Crisis-Prone Industries in 2016
• Automotive
• Pharmaceuticals
• Food
• Banking, Insurance and Financial Services
• Health Care
• Manufacturing
• Government agencies
• Transportation
• Energy
2 © 2016 Institute for Crisis Management. All Rights Reserved
2016 CRISIS CATEGORIES
OTHER: Catastrophe 1.01%; Casualty Accidents 0.14%; Financial Damage 0.14%; Hostile Takeover 1.64%; Labor Issues 0.14%; Sexual Harassment 0.48%
© 2017 Institute for Crisis Management. All Rights Reserved 2
of the stories tracked, compared to 31.41% the pri-
or year. Among the headlines last year were stories
of price gouging in the pharmaceutical industry,
including embattled Mylan NV, maker of EpiPen.
CEO Heather Bresch was grilled by reporters and
lawmakers alike over what was viewed as excessive
profit from a relatively inexpensive drug. Valeant
Pharmaceuticals also faced scrutiny and its financial
results suffered following similar grilling that even-
tually drove out the CEO.
Volkswagen continued to generate headlines all
year as its emissions scandal from 2015 unfolded.
Beleaguered clothing company American Apparel
filed for bankruptcy protection following years of
controversy over misbehaving former CEO Dov
Charney. In May, LendingClub’s CEO was ousted
over misleading sales practices. Accounting giant
PricewaterhouseCoopers LLP settled a $5.5 billion
lawsuit over its alleged failure to catch the massive
fraud that led to one of the most expense bank fail-
ures in U.S. history. And in Paris, a French court
convicted and fined Uber and two of its executives
for deceptive commercial practices and illegal busi-
ness activity.
Discrimination
Discrimination stories skyrocketed, especially in
the U.S., to 20.61% of stories tracked. According to
the Pew Research
Center’s 2016
study, nearly half
of Americans sur-
veyed say that
race relations are
generally bad.
Just 19% said that race relations were improving,
while four-in-ten said they were getting worse. Race
relations in the U.S. suffered during the year, with
reports of violent acts by police and others. Papa
John’s Pizza made headlines when a Denver-area
employee printed a racial slur on a pizza box ‘as a
joke.’ Papa John’s also found itself in the news
when a Louisville, Ky., area employee used a racial
slur about an Asian customer. Another restaurant
chain, Noodles & Co., suffered when an employee
refused to serve police officers in uniform.
In North Carolina, the so-called “bathroom bill”
cost the state millions of dollars and thousands of
potential new jobs when businesses spoke out
against the law, called off planned expansions or
canceled events. The NBA moved its 2017 all-star
basketball game out of the
state, and the NCAA relo-
cated seven championship
games that had been
scheduled there. PayPal
canceled a planned expan-
sion that would have cre-
ated an estimated 1,300
new jobs and $285 million economic impact.
Deutsche Bank halted a planned expansion that
would have employed 250. Entertainers and the
film industry also boycotted the state, canceling
concerts and film projects. Legislators’ attempt to
repeal the controversial law failed in December.
Natural Disasters
Natural disasters accounted for just one percent
of stories tracked in 2016. In what some termed
the “year of the earthquake,” natural disasters
claimed 8,250 lives, a significant decrease from the
more than 19 thousand reported in 2015. Still, dev-
astating quakes hit in Italy, New Zealand, Indonesia,
Japan, Nepal, Ecuador and other areas in the Pacific
“ring of fire.” Among the largest natural disasters
of 2016 were a quake in Taiwan that claimed 117
lives; 6,938 wildfires in California that destroyed
more than 565 thousand acres; August flooding in
Louisiana that killed 13 and forced 30 thousand
from their homes. Hurricane Matthew in October
killed 1,600 and left more than $10 billion in dam-
age in its wake. August floods in China caused 181
reported deaths and Typhoon Lionrock in North
Korea claimed an estimated 100 lives.
Data Breach and Cybercrime
Cybercrime stories creeped up slightly to just un-
der 5% of stories tracked. The Identity Theft Re-
source Center tracked 980 reported U.S. breaches
3 © 2016 Institute for Crisis Management. All Rights Reserved © 2017 Institute for Crisis Management. All Rights Reserved 3
comprising more than 35 million records, an in-
crease of 25% over the ITRC’s 2015 results.
Healthcare accounted for 36% of breaches and an
alarming 44% of records, while Government com-
prised 6.7% of breaches for 37% of records compro-
mised. In their annual study, Ponemon Institute and
IBM reported the average cost of a data breach at
$4 million, a 29% average cost increase since 2013.
The study noted an average per-record-breached
cost of $158 USD.
Among the notable breaches reported were in-
dustry stalwarts like retailer Eddie Bauer, Verizon
Enterprise Solutions, Capital One and Charles
Schwab, Habitat for Humanity and the Florida Bar
Association, Omni Hotels and Wyndham Vacation
Resorts, Chicago Public Schools, Dropbox, Tumblr
and Google, even Krispy Kreme Donuts.
More alarming were well-planned attacks that
knocked out electric utilities in Ukraine and the
summertime hack of the U.S. Democratic National
Committee’s network. Officials in several countries
have raised concerns about the security of critical
infrastructure such as
power and water utili-
ties. Three years ago, at
least four American
electric utility compa-
nies were hacked,
threatening to destabi-
lize large areas of the
power grid. A variety of
malware programs
were used, including BlackEnergy, KillDisk and oth-
ers. Ransomware demands ramped up in 2016, as
well, with disturbing attacks on large healthcare
systems, including against Washington, D.C.-area
hospital chain MedStar Health.
White Collar Crime
White-collar crime stories decreased by about 30
percent from 2015, to 10.45% of stories tracked.
Embattled pharmaceutical company Valeant was
hammered again when charges were filed alleging a
multimillion-dollar fraud and kickback scheme in-
volving an employee and a mail-order pharmacy
company. In March, the federal government
charged 12 current and former Detroit, Michigan
school principals with a nearly $1 million-dollar
bribery and kickback scheme. In a wide-ranging in-
vestigation into generic drug price fixing, 20 states’
attorneys general
accused two in-
dustry leaders,
Teva Pharmaceuti-
cals and Mylan, of
engaging in brazen
price-fixing
schemes. In Penn-
sylvania, a former
employee of Utz
Quality Foods, Inc. was charged in a false invoice
scheme that defrauded the company out of $1.4
million.
Workplace Violence
ICM noted a significant increase in workplace vio-
lence stories in 2016, to 5.91% of stories tracked,
up from less than one-half of one percent the previ-
ous year. Part of the increase is attributable to
ICM’s addition of more English-language news out-
lets covered. But several high-profile stories, includ-
ing mass shootings in Orlando, Florida and terror
attacks in Nice, France and Brussels, Belgium, also
accounted for some of the dramatic increase in
news coverage for acts of violence. Thirty-one
people were killed and hundreds injured in Brussels
in March in an ISIS-inspired attack. Fifty people
died in a terror-inspired mass shooting at the Pulse
nightclub in Orlando, Florida in June. At least 84
people were killed and dozens more injured when a
truck deliberately drove into crowds of people cele-
brating Bastille Day in Nice, France, on July 14.
Labor Disputes
Labor issues accounted for less than one-quarter
of one percent of stories tracked. In December,
nearly 5,000 doctors and nurses across Kenya went
4 © 2016 Institute for Crisis Management. All Rights Reserved © 2017 Institute for Crisis Management. All Rights Reserved 4
on strike, demanding an increase in pay and better
working conditions. Union leaders said that the
government had not honored terms of an agree-
ment reached in 2013. Rail workers in Great Britain
walked off the job for 48 hours, impacting hun-
dreds of thousands of commuters in a dispute
about whose job it should be to open and close
train doors. In June, an unprecedented strike at
China’s Taiwan Airlines ended after less than 24
hours when management agreed to all the de-
mands by flight attendants. Korea’s Hyundai Motor
was hit with its first walkout in 12 years in Septem-
ber over wage increase demands. In the U.S., work-
ers at Verizon Communications staged the largest
reported work stoppage in that country, involving
more than 36 thousand workers and 1.2 million
workdays idle. And at Harvard University, striking
dining hall workers reached a tentative agreement
with administrators after three weeks off the job.
Executive Dismissals
Executive dismissal stories dropped nearly 40
percent from 2015. Embattled Wells Fargo CEO
John Stumpf was forced out after a customer fraud
scandal involving millions of bank accounts opened
by employees without
customers’ knowledge in
an attempt to meet ag-
gressive sales goals.
Chipotle co-CEO Monty
Moran was forced out by
its Board after the com-
pany’s multiple food safety crises. German au-
tomaker Daimler fired one its executives following
his anti-Chinese rants and use of pepper spray in a
dispute over a parking spot in Beijing. Rolls-Royce
Holdings removed one of its directors from the
Board after he was fired from his executive job at
mining giant Rio Tinto. Duke Energy Corp. agreed
to a $27 million settlement of claims that directors
wrongfully concealed their plan to oust CEO Wil-
liam Johnson just minutes after the company
closed on a multi-billion-dollar merger with Pro-
gress Energy Inc. Two top executives at the non-
profit Wounded Warrior Project were sacked fol-
lowing media reports of outlandish spending on
conferences and other outings.
Defects and Recalls
Product defects and recall stories were virtually
unchanged at 2.99%. In one of the biggest recall
stories of the year, Samsung Electronics was forced
to recall millions of its new Galaxy Note 7
smartphones within weeks of their launch due to
exploding lithium ion batteries. In an unprecedent-
ed move, the U.S.
Federal Aviation Ad-
ministration banned
the devices from all
commercial flights.
Samsung was rattled
further when it re-
called 2.8 million
washing machines
due to malfunctions
that caused some
injuries. Toshiba recalled 91,000 laptop batteries
due to overheating and melting issues. In a long-
anticipated move, furniture retailer IKEA recalled
29 million chests and dressers after numerous inju-
ries and a few deaths from unstable dressers top-
pling over onto children.
Automotive recalls set another record with 53
million vehicles recalled during the year, including
52,000 Subarus for steering column issues, 58,430
Toyotas for airbag issues, 154,472 BMW cars with
fuel pump problems and 1.1 million Jeep Grand
Cherokees following the tragic accidental death of
actor Anton Yelchin.
Nestle USA recalled varieties of its DiGiorno pizza,
Lean Cuisine and Stouffer’s frozen foods over con-
cerns about small pieces of glass in spinach. Gen-
eral Mills recalled 10 million lbs. of flour linked to
an E.coli outbreak. CRF Frozen Foods recalled 47
million lbs. of frozen fruits and vegetables linked to
listeria. A supplier to Wal Mart recalled 90 thou-
sand lbs. of beef patties for possible contamination
with extraneous wood.
5 © 2016 Institute for Crisis Management. All Rights Reserved © 2017 Institute for Crisis Management. All Rights Reserved 5
Environmental Damage
Environmental damage stories decreased by more
than half from the previous year at just 2.51% of sto-
ries tracked. According to activist website trueactiv-
ist.com, three U.S. nuclear power plants suffered ma-
jor leaks, including
the Indian Point
plant in New York,
where a groundwa-
ter leak contami-
nated three moni-
toring wells. Gov-
ernor Andrew Cuomo has repeatedly called for shut-
down of the plant.
Environmental website rt.com reported that there
were 354 hazardous liquids pipeline spills by the end
of November, citing statistics from the Pipeline and
Hazardous Materials Safety Administration. Accord-
ing to the story, 16 percent of the leaks involved 100
or more barrels of product. In November, an explo-
sion along the Colonial pipeline in Shelby County,
Ala., killed one worker, injured five others and shut
down a major gasoline and diesel artery that moves
fuel from Texas to New York. In Peru, four large oil
spills were reported that polluted tributaries to the
Amazon River, all attributed to PetroPeru, the coun-
try’s largest oil company.
Consumer Activism
In 2016, stories about consumer activism decreased
by seventeen points to 6.45% of stories tracked. An
activist in Omaha, Nebraska, asked a federal court to
ban balloons released at University of Nebraska foot-
ball games, alleging the release of balloons violates
environmental laws. Anti-balloon campaigns have
pushed for stronger legislation across the U.S.
Whistle-Blowers
Whistle-blower stories accounted for 6.23% of sto-
ries tracked in 2016, a six percent increase over the
previous year. Perhaps the biggest whistle-blower
story of the year was the release of more than eleven
million records— known as the Panama Papers—
from the database of Panama-based law firm Mos-
sack Fonseca. The documents revealed the myriad
ways the rich exploit secretive offshore tax regimes,
causing embarrassment for numerous political lead-
ers, including Vladimir Putin and the father of former
British prime minister David Cameron.
A whistle-blower who received a $22 million payout
from Monsanto after he revealed accounting viola-
tions said he was not satisfied with the outcome be-
cause the problem “didn’t get fixed.” Oracle Corpo-
ration was sued by a former manager who claimed
she was terminated in retaliation for complaining
about improper accounting practices. Pennsylvania-
based Respironics Inc. agreed to pay $34.8 million to
settle kickback allegations. Two U.S. defense contrac-
tors paid $8 million to settle allegations of selling de-
fective counter-measure flares to the U.S. Army. In a
startling development, the first director of victim ad-
vocacy at the Peace Corps was suspended after she
complained that the nonprofit was not doing enough
to address problems related to the sexual assault of
volunteers.
Lessons Learned
Management denial is the biggest im-
pediment to effective crisis manage-
ment. About half of all organizations
worldwide have no crisis plan in place,
increasing both their risk and the
probability of severe financial impact
when the inevitable happens. Organi-
zations that plan and prepare for crisis are better po-
sitioned to prevent, mitigate and minimize financial
impact and reputational damage in case of crisis.
Among the most important crisis lessons of 2016:
• Understand your organization’s vulnerabilities and
develop strategies to address them.
• Know who your key stakeholders are and whether
they are advocates or adversaries.
• With social media, listen, then engage stakehold-
ers before crisis strikes to build a goodwill bank.
• Expect a crisis to break first on social media.
• If you haven’t already, invest in a crisis communi-
cation plan for the organization.
• If you have a crisis communication plan, update
and exercise it this year!
• CALL ICM TODAY TO HELP YOU GET IT DONE!
5 © 2017 Institute for Crisis Management. All Rights Reserved 6
Deborah Hileman, CMP ICM President and CEO
A certified communication management professional (CMP), business leader, coach and consultant with more than 30 years’ experience in public and private companies and non-profit organizations, Ms. Hileman has led high-performing communications teams in health care, manu-facturing, insurance and fi-nancial services, nonprofits and higher education.
Known as a voice of calm in the midst of chaos and crisis, Ms. Hileman has earned a reputation as a trusted communication strategist and advisor to board members and C-suite executives, operations leaders and other organizational stakeholders. She has developed and implemented successful communication strategies for numerous business issues, including mergers and acqui-sitions, bankruptcies, closures and layoffs, natural disas-ters, labor strikes, controversial development plans, criminal prosecutions and federal civil investigations, workplace violence, executive malfeasance, investor litigation, wrongful death, harassment and abuse investi-gations, social media attacks and cybercrime, among others.
She has delivered media relations training and coun-sel to hundreds of executives and managers, coaching them to “think on their feet” in a crisis and manage media interviews calmly and effectively.
A regular writer and blogger on business communica-tion topics, she is the author of "Building a Crisis Early Warning System by Empowering Employees to Speak Up", published in The Book of Employee Communica-tions Strategies & Tactics, vol. 5, PR News Press, and "Attorneys as Allies: Balancing Stakeholder Needs with Legal Concerns During a Crisis", published in The Writer’s Guidebook, Vol. 2, PR News Press.
Based in Denver, Colo., Ms. Hileman is involved with several community and professional organizations, in-cluding the South Metro Denver Chamber of Commerce, the Public Relations Society of America, the International Association of Business Communicators and other organ-izations. She will serve as 2017-18 chair of the Global Communications Certification Council, and is a Board member of the Invisible Disabilities Association, a Colora-do-based 501(c)3 non-profit organization.
6 © 2016 Institute for Crisis Management. All Rights Reserved
Crisis Communication Management
Certification Course Our most popular course
for 27 years, all new for 2017!
Tulsa, Okla.
May 2-3
Louisville, Ky.
June 12-13
Denver, Colo.
Sept. 18-19
US $1,749.00
Crisis Media Training Tulsa, Okla.
May 4
Louisville, Ky.
June 14
Denver, Colo.
Sept. 20
US $1,095.00
Save $349! Enroll in Both Courses
Just $2,495.00 USD
Register on our website at
http://CrisisConsultant.com © 2017 Institute for Crisis Management. All Rights Reserved 7
ICM Prepares Executives to Lead Before, During and After a Crisis
• Crisis planning and preparedness
• Vulnerability and risk assessments
• Risk-specific planning tools
• Crisis plan development
• Simulation exercises
• Management training
• Strategy and message development
• Spokesperson/ media training
• Mainstream and social media monitoring,
analysis and reporting
Crisis Response
We are on call 24/7 for immediate strategic and
tactical support:
• On-site crisis response team
• Message strategy, development and manage-ment for all key audiences / stakeholders
• Executive and spokesperson coaching and
interview preparation
• Media relations services for the duration of
the event
• Comprehensive media and social media monitoring and analysis
• Reputation management and damage
mitigation
Why Partner with ICM?
Founded in 1990, ICM was one of the first firms in
the U.S. to specialize in crisis management and
communication. We’ve supported leaders from
small to medium sized companies to multi-billion-
dollar international corporations across numerous
industries, nonprofit organizations, religious insti-
tutions, colleges and universities, government
agencies and more.
It is much easier to prepare and prevent
than to repair and repent
Our experience includes work with virtually every
type of business issue or crisis, including:
• Activist threats against company or executives
• Boycotts and picketing
• Controversial issues or projects
• Criminal prosecutions and federal civil investigations
• Crude oil spills
• Executives facing indictment
• Employee fatalities on the job
• Highly contagious illness or pandemic
• Illegal or unethical behavior by employees
• Major organizational change
• Mergers, acquisitions and bankruptcies
• Natural disasters, including wildfires, hurri-canes and earthquakes
• Online reputation attacks
• Plant closings and downsizings
• Product recalls
• Serious incidents involving multiple victims
• Social and political issues
• Sudden death or incapacitation of a key executive
• Unfounded rumors that disrupt operations
• Violent strikes and labor disruptions
• White collar crime
• Workplace shootings, assaults and violence
• Wrongful death and patient abuse investigations
Institute for Crisis Management® Denver, Colorado, USA
Call Us 24/7 at +1 (888) 708 – 8351
http://CrisisConsultant.com
®
7 © 2016 Institute for Crisis Management. All Rights Reserved © 2017 Institute for Crisis Management. All Rights Reserved 8