Exploring Corporate Crisis Communication after COVID-19: The Role of Enterprise Risk Management in (Re)Building Trust

This study aims at investigating whether Enterprise Risk Management (ERM) sophistication shaped different COVID-19 crisis communication strategies. We assess the level of ERM sophistication of the FTSE-MIB Italian listed companies, and we study the pattern of risk communication strategies building on Situational Crisis Communication Theory (SCCT). We find that companies with a low level of ERM sophistication generally adopt a crisis communication strategy based on a “denying/diminish” approach. In contrast, companies with higher ERM sophistication adopt a “diminish/rebuild” strategy. Our results extend previous literature on crisis communication by looking at the unique case of the COVID-19, a non-company-specific crisis that hit all firms. Results show company crisis communication strategies depend on prior risk management characteristics. Thus companies willing to protect their reputation and (re)build public trust because of a crisis should invest not only in risk communication but also in their risk management process.