Extortion and Reputation - Part 2

14 February 2018

Managing a crisis is very different from the day-to-day management issues faced by an organisation. The team nominated to mitigate a crisis should be tailored according to the type of incident. A well-constructed Crisis Management Team (CMT) is the nucleus of effective crisis response and can greatly minimise the likelihood of damaging reputational risk exposures in the event of a crisis.

Unlike daily management of the business, during a crisis incident - such as an extortion, blackmail, cyber breach or kidnapping - there are the following impediments a CMT may contend with:

  • The element of surprise;
  • Accelerated and high-octane speed of events;
  • Spotlight media attention;
  • Restriction of management team’s freedom of activity;
  • Involvement of authorities, police, government, clients and other stakeholders;
  • Staff safety may be at risk and, if so, becomes a paramount issue;
  • Decision making based on potentially inaccurate or incomplete information;
  • Potential for damage to reputation, loss of intellectual property, client information or assets;
  • Dealing with potentially irrational agents (i.e. blackmailers, extortionists, cyber-criminals);
  • The issue of control becomes more important than ever due to competing agendas and diverging interests of various stakeholders.

The CMT is the ultimate owner of your organisation’s crisis response plan and has the task of developing coordinated mitigation measures to manage a fluid situation. A misconceived CMT risks losing control, which can lead to indecision, wasted time and an increased likelihood it will succumb to the numerous pressures a crisis brings.

Common errors leading to significant reputational risk include: a premature announcement to the public, a poor selection of ‘communicator’, a failure to acknowledge or put too much importance on stakeholders’ differing agendas, a failure to use resources effectively or an abdication of responsibility.

A CMT should be in place before a crisis occurs and be able to convene 24/7. A blueprint for a model extortion, blackmail or kidnapping response CMT might look as follows:

  • Consist of 3-5 members;
  • Include a chairperson with authority to agree to financial settlements;
  • Include an incident coordinator;
  • Include deputies representing technical expertise and differing organisational interests;
  • An ancillary Advisory Team who will participate in meetings as needed. These members can come from legal, IT, HR, finance, communications or security;
  • A back-up CMT which can be rotated in on a 30-day basis to ensure clear decision making and limit operational fatigue;

It is important to note that during an incident such as an extortion attempt, where a negotiation is required, the designated ‘communicator’ should not be part of the CMT and should not by privy to CMT decision making.

Remember that you are not alone in the run up to and during a crisis. An experienced crisis response expert can provide training and can be utilised almost immediately in the event of an incident to guide your CMT and limit potential reputational fallout. The crisis responder can steer the team, maintain momentum in negotiations, reduce extortionists’ expectations, prioritise the firm’s interests and implement a disciplined financial and communication strategy.

As extortion attempts continue to impact businesses, individuals, multinational corporations, family offices and governments in a wide array of operating environments, an effective crisis response plan and well-constructed CMT is crucial in limiting an organisation’s reputational exposure. In fact, a CMT can even improve reputation through clear, concise actions that show your organisation not as a victim but as an advocate for its clients and employees.

To read part one of this Extortion and Reputation series, click here.

Receive our monthly newsletter

About the Author

Brittany Damora

Senior Associate, Advisory

​Brittany has extensive experience in international crisis response and risk mitigation; advising wealth owners, international families and governments on a range of security threats, as well as leading incident response teams when a crisis hits.

+1 646 934 6219
Our 24 hour number
+1 646 934 6219
Legal information

© 2020 Schillings International LLP. SCHILLINGS is a trading name of Schillings International LLP and Schillings International (USA) LLP.

Schillings International LLP is a limited liability partnership registered in England and Wales with registration number OC398731. A list of members of Schillings International LLP is available for inspection at our registered office 12 Arthur Street, London, EC4R 9AB. Schillings International LLP is an Alternative Business Structure regulated and authorised by the Solicitors Regulation Authority.

Schillings International (USA) LLP is a registered limited liability partnership organised and existing under the laws of the State of Delaware, United States of America, whose principal place of business is at One World Trade Center, Suite 8500, New York, NY 10007. Our New York based attorneys are registered as a foreign legal consultant in the State of New York.