How a corporation responds to a potential crisis involving allegations of an ethical lapse on the part of a senior executive has the potential to shape its corporate image long after the initial event is over. As Toyota and the Subway corporation are currently discovering, despite all best corporate governance efforts, including expertly crafted corporate compliance programs and codes of conduct, no corporation is immune from the damage that can be sustained from the alleged ethical lapse or misconduct on the part of a senior executive or corporate spokesperson. Mitigation efforts can be especially challenging when the senior executive's alleged unethical or illegal conduct is unrelated to the corporation's operations.

A comprehensive understanding of the underlying relevant facts is critical to the corporation's decision making process. As well as a proactive and focused mitigation protocol that provides the corporation with the ability to demonstrate a good faith response to the misconduct.

All too often, C-suite executives believe that due to their organization's robust and comprehensive compliance programs, their organizations are well protected from such ethical crises involving their key executives. As a result, integrity mitigation protocols tend to be assigned a low priority at the senior executive level.

Research studies have indicated that on average upwards of 60% of CEO's and corporate boards have failed to successfully embrace integrity mitigation protocols into their overall corporate strategic planning. Given the potential consequences to the organization if such events are not proactively mitigated, it is essential that an organization has an effective risk mitigation program in place so that senior management can be prepared as best they can be. This is particularly true in today's 24/7 news cycle and sound bite journalism. In the current environment, where instant access to the news is so readily available, a corporation cannot afford to play catch-up.

In the event that the senior executive's alleged unethical or potentially illegal conduct is unrelated to the organization's operations, the potential fallout and reporting obligations may not be readily apparent to the organization. This is particularly important to corporation's that are publicly traded and heavily regulated, in which case, the alleged misconduct may require certain reporting obligations on the part of the organization.

Failure to comply with the mandatory reporting requirements, has the potential to increase the organization's civil and criminal liability exposure. The FCPA, SOX and other statutes and regulations all impose varying levels of disclosure requirements.

In instances where the corporation learns that a senior executive is the subject of a government civil or criminal investigation, the corporation should take steps to monitor and if possible manage the company's cooperative efforts with investigators. The goal here is to demonstrate the organization's good faith response to the misconduct and more importantly, attempt to shape and focus the investigation away from the organization. In all discussions with investigators or prosecutor's, the corporation's should attempt to underscore the organization's incidental connection to the matters under investigation.