What not to do after a scandal

And so the proverb goes that silence is golden--especially when you've just come off a flight with bawling kids.

But in the corporate world, silence doesn't always mean golden. And sometimes, the worst thing a company can do is stay mum.

The PR representatives for Satyam went into damage control overdrive almost immediately after it sent out a press statement last week that Satyam's CEO and founder had resigned amid an accounting scandal.

Numerous media releases followed, detailing the board's action plan and assurance to customers that it's doing what's necessary to put the company back on the right path. A press conference cum Web cast has been held, and I've received over 10 e-mail messages from Satyam's PR rep over the past week.

Some may find that excessive, but with news of that magnitude, I think it's a necessity. In fact, it's what any company that wants to be deemed a serious market player should do after it's been hit by a scandal.

Take the recent system breakdown at the Singapore Flyer. Passengers trapped in the observation pods were kept in the dark for over six hours without any update on what's being done to resolve the problem. Complaints ensued and the Flyer's management team received a whole lot of flak for the way it handled the matter.

Sometimes, even bad news is news. And how well a company contains a piece of news will ultimately reflect on the organization.

When a company chooses to remain silent rather than respond to what it perceives to be "bad news", it inevitably invites speculation that it has something to hide and leaves customers to imagine the worst. Whether there was any wrongdoing is irrelevant, the company needs to respond, and it needs to respond promptly.

In the case of Satyam, it did the only thing it could do when a company is embroiled in controversy--it responded.