Security breaches and employee actions pose the greatest potential for crisis within organizations, according to a recent polling of Silicon Valley executives and in-house counsel.
The data, collected by international law firm Weil Gotshal & Manges at its “Weathering a Crisis: Corporate Governance Symposium” in May, provide a snapshot of respondents’ preparedness and level of concern for various internal, external and financial crises.
When asked to rank the top eight most probable causes of corporate disaster, more than 75 percent of those polled selected employee actions and security breaches as either the number one or two threat, with product failures and lawsuits against the company coming in a distant third and fourth.
Systemic preparedness for crises and employees’ use of social media during such events were also top of mind among attendees. Nearly 65 percent believed their companies do not have a policy limiting social media use during crises, or indicated they weren’t aware of one. Of those polled, 80 percent said their organization had not completed an internal stress test or mock crisis scenario to test preparedness. Just 12 percent characterized their organizations as “very prepared” for a crisis.
“Crisis situations stemming from security breaches and employee actions are very real, and companies should have a game plan in place to handle such events,” says Craig Adas, managing partner of Weil’s Silicon Valley office. “Our goal at the symposium was to help in-house attorneys and executives identify where the potential dangers lie and how they can best communicate with their stakeholders in the midst of a crisis.”
More than 100 Silicon Valley decision-makers attended the symposium, including in-house counsel, corporate executives, accounting professionals, public relations specialists and risk managers.