AIG Financial Communication Crisis Plan by Samantha Campana

Financial Crisis Communication Plan Annabel Lee and Samantha Campana March 7, 2013

Table of Contents Crisis Assessment

Communication Materials

Identifying the Audience

Communication Channels

Media Monitoring

Evaluation

Crisis Assessment There are many complex factors that created the turbulent circumstances for this financial crisis. As stated by the Senate Financial Crisis Report, “high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street”1 were the main contributors to this collapse. Given the government involvement in AIG’s bailout, this crisis will be widely public and sensitive topic for all taxpayers. Additionally, Wall Street and the American financial industry are infamous for being ridden with scandal and corruption. The government takeovers of other major financial institutions such as Lehman Brothers, Fannie Mae, Freddie Mac, Merill Lynch and Citigroup have generated immense concern and uncertainty among the media and the public, and also magnifies the severity of the issue. Therefore, this crisis will have colossal effect on both nationwide and international economic affairs,and as such, requires a high level of sophisticated communication strategy.

Communication Materials Communication occurs in the mind of the receiver, therefore understanding the current physical, mental and emotional state off our audience is crucial. Accordingly, the messages that we plan to deliver need to reflect this. During the AIG liquidity crisis, a crisis that has economic and global effect, it is important to ensure that our messages and communication materials contain information to establish trust and ascertain credibility in our organization. Well composed messages, delivered effectively, are more likely to disperse panic and fear. In fact, it would be ill-advised to withhold information or to de-emphasize the gravity of the situation for fear of instilling panic. 1

Wall Street and the Financial Crisis: Anatomy of a Financial Collapse. (2011). Committee on Homeland Security and Governmental Affairs, Retrieved on March 4, 2013.

As the crisis evolves, communication must mirror the progression. Dividing the situation into different stages allows for easier anticipation of the information needs of the media, stakeholders, and the general public. Moreover, each phase of the crisis should have its own unique informational requirement. The extent and duration of the situation will also affect the required communications material and the number of staff needed for production. In terms of AIG liquidity crisis, the crisis communication phases should be as follows:

Anticipated Questions

Initial      

  

What happened? Where and when? Who is responsible? Who is to blame? How will this affect the stakeholders? What measures are taken to protect or help people? What are we doing about it? Who is in charge? What is going to happen next?

 Acknowledge the

Information Goals

   



gravity of the event with empathy Establish trust and build credibility Describe the situation in simple terms Provide information channels Ensure stakeholders receive up-to-date information Establish a good relationship with the media

Maintenance  What are the continued risks?  Why are we doing what we are doing?  Why are we not putting in more effort nor doing something differently?  Who has the most accurate information?

Resolution 



 Ensure the situation and risks are accurately understood by the media, public and stakeholders  Supply continuous information to those who need it  Monitor the media and correct any misinformation

Why was the response not better or conducted differently? Why is it taking so long to __________? Who is responsible for returning the situation back to normal? Is this still relevant if it is no longer in the news?

 Investigate

 



difficulties, mishaps and problems Reinforce the effective tactics Improve future responses through education of the current response Promote the capabilities of the organization · Offer/create support for changes in policy and resource allocation

Evaluation N/A

 Debrief and evaluate the crisis communications plan  Develop an improvement plan to address training needs for future plans  · Revise the plan to encompass changes and modifications based on lessons learned

A message should be drafted with the anticipated questions and information goals in mind. It is imperative that the message is clear, simple and direct with no more than three salient points and free of jargon or technical terms. It is possible to use the same message for multiple audiences, however consider if minor adjustments are needed. Additionally, it would be helpful to have other information readily available such as a set of frequently asked questions and answers on the website. As messages are being developed, ensure that they are clear and direct for the intended audience. The development of messages can be broken into sections by undertaking one event or situation at a time or one audience at a time. Messages should be reused as much as possible to guarantee cohesiveness. Considering these factors, AIG’s key messages in this crisis are: 1) share the implications of the bailout plan in a clear and jargon-free way to maximize comprehension, 2) to re-establish the credibility of the organization and ensure our customers that we are looking out for their best interests, and 3) identify the official communication channels.

Identifying the Audience Many people will be affected by the governmental bailout so it is important to target all of these people appropriately. The audience will encompass those who work within the organization, the board of directors, our clients, both companies and individuals, and the public. Because of the nature of this crisis and its involvement of the government, it is important that the public is addressed in our response. Board of Directors It is extremely crucial for the Board of Directors to be directly involved with this crisis because they are some of the key decision makers for AIG. They are one of the first groups that should be informed of the bailout terms in order for them to have input on how the information should be shared to the rest of the organization, its clients and the public.

Employees It is important for the terms of the bailout to be given correctly to the employees of the company because they need to be informed of the impacts for the organization. The implications need to be explained so that they know how to respond to, or interact with each other and their clients. This information should be tailored to them so it addresses what their role will be in the coming months and, in addition, gives certain levels of middle management training on how to lead their teams through this turbulent time. Clients Our client base will be divided into two separate groups: 1) individuals affected both those who have business with AIG and individuals who may hold shares in AIG and 2) organizations affected. These two groups will interpret the information given in different ways, but it is important that both are served with equal care. It is imperative that AIG maintain their reputation during the crisis so that confidence in the organization is maintained. Public/Media Due to the massive scope of influence in this crisis and the involvement of the government it is important to consider the general public as an audience in this crisis. Although they will not be the first priority of this crisis campaign, the public’s interpretation of this information and our involvement, will influence opinions and judgments. The public in this case will include the media and media outlets because they will be looking to disseminate this information as breaking news. In addition to identifying our audiences it will be important to have special resources in place to assist those with disabilities and those who are having trouble understanding the scope of the crisis. Since this information is quite serious, and challenging to comprehend, it is important that everyone who needs to understand the message is interpreting it in the right way.

As such, we must have support personnel ready to provide information to those who are deaf and/or blind, provide translations for those who are not proficient in English and provide general guidance to those trying to understand this complex issue.

Communication Channels For each of the audiences identified it will be important to select the appropriate channels to reach them. Different channels work better for different audiences and different situations, and selecting the right channel can positively impact the message. It will be important to have a face-to-face meeting with the Board of Directors to discuss the terms of the bailout plan. It is also advised to discuss this information in person with these high status individuals so that plans can be made for the future of the organization. This channel is appropriate for this level of personnel because it expresses the importance of the information and ensures that proper and immediate communication occurs during this crucial time. Decisions will have to be made quickly so it is crucial that information is shared clearly. This can be ensured through face-to-face communication. The spokesperson for this group of people will be the CEO of AIG and all high level members of the organization should be present at this meeting. Once the Board of Directors have been informed and a response plan has been decided on, it is important to let AIG employees know how they should react to this information. They will need counseling on how to interact with clients and a channel of information should be established. For the size of the organization it would be best to have a company wide email from the CEO distributed to the rest of the company so that there is only one source of credible information being circulated. Any middle managers that require extra direction on how to proceed in the crisis should be given that information as well. This guidance can come from other advisors that are lower down than the CEO so that the delegation of roles can occur. This may have to be done through small group meetings that address more specifics sections of the

business, such as Human Resources and Client Relations. Email is the best channel for internal communication because of its speed and its ability to connect all members of the organization, while face to face communication is good for instances where two way discussion and brainstorming may need to occur. It will be important to give AIG clients accurate, clear and immediate information. The channels that are established have to be reliable and effective. The clients of AIG should be addressed using a few different channels. 1

A press conference, including a press release, should be held so that the terms of the bailout could be explained to the clients and also so that the implications can be shared. This will also allow the media to be addressed. It will be important during these communication events that the messages are very clear and that simple terms are used so that everyone can understand what is going on. It will also be important to reassure that AIG is looking out for the best interest of our clients and that they are our first priority. The spokesperson for this communication event should be AIG’s CEO because of the severity of the situation. Guidance for where and when reliable information will be given should also be provided. This press conference should be broadcasted on television and available to be streamed for free online from our website.

Meetings will be held for high profile clients so their business is maintained. The client managers, who have established relationships with the client, can conduct these meetings.

Our official website will dedicate a section to providing up to date information and resources for organization and individuals. This will tailor the information to be more specific depending on the kind of client. Official AIG social media platforms, such as AIG’s official Facebook page should direct users to the website for detailed information about the issue.

Media Monitoring Other than distributing and disseminating messages, media monitoring is also a significant component of the crisis communications plan. Observing what is being reported, what is being said or what is being asked by the target audience allows the organization to improve and clarify the content or focus of the key messages. Media monitoring allows for recognition of inaccurate information and a chance to rectify the misinformation before it gets out of hand. The high degree of monitoring will be required in this case considering the global and economic effect of this crisis. The Crisis Communications Director will need to appoint staff members to closely monitor every type of medium including television, radio, social media, print media, web-based news sites, and blogs etc. A communication monitoring protocol will also need to be established.

Evaluation When the crisis is over, it is wise to debrief the plan and draft a post-event evaluation to highlight the lessons learned, the tactics that worked well, and the concepts and procedures that require improvement. Things to evaluate include, but are not limited to: ○

The effectiveness of the messages: Were they well received and interpreted in the way we intended?

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The execution of the communication channels: Were they used efficiently and garnered the expected results?

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Media monitoring: Was the crisis monitored with efficacy? Were we able to address the concerns and needs through our responses?

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Audience: Were they clearly identified and addressed? Did we fail to acknowledge someone or a group?

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Spokesperson: Were they able to deliver our messages clearly and effectively?

Note that the resolution phases of the crisis communication timeline may continue well beyond the initial crisis due to its significant impact on the global economy. As such, our evaluation needs to include how the organization should continue developing responses and addressing the outcomes of the event. It is important to acknowledge our successes as well as our mistakes and missteps during the response phase in addition to promote the abilities of crisis communication within the organization. This would also be a good opportunity to consider changes in policy and resource allocation to establish support within the organization and the community.

Bring on Tomorrow