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Crisis Communication:

By Suzanne Spurgeon  December 17, 2015

It is never a good thing when your company's CEO is referred to as "Pharma Boy" and is hated by millions.  Imagine how the boards of Turing Pharmaceuticals and KaloBios Pharmaceuticals are reeling today with the news that their CEO Martin Shkreli has been arrested on securities fraud charges.  His "perp walk" photo is everywhere.  I have had so many Facebook postings of this photo, that I stopped counting.  Expect all the network newscasts to play up this story tonight. The public sees this CEO as a smug guy who is experiencing a bit of Karma--after his HIV drug price gouging.

So what do his colleagues do now?  They start distancing themselves from Shkreli and work with their PR teams to carefully craft messaging. These are publically traded companies so there are guidelines that need to be followed.  Already stock is plunging at KaloBios.

Whenever I conduct crisis communication training with companies, I insist on including a practice scenario in which a top executive is accused of major wrong doing and may even be arrested.  Some executives scoff, but this situation is not as rare as they may think.  

In high risk or high profile industries the stakes are very high.  Think back to 2010 and the deadly mine disaster at a Massey Energy Mine.  The former CEO, Don Blankenship, has just been convicted of conspiracy related to that disaster.  He "retired" before the firm was aquired by another energy company in 2011.  Putting aside the many legal issues, the CEO made the story all about him and showed a lack of sensitiviy in dealing with the victims' families. Check out his report from ABC News from a few years back.



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