It was designed to serve as a model for understanding how to respond to an online attack. It turned out to be an object lesson in why organizations continue to need the guidance of a senior social media adviser.

At the Monday morning “general session at IABC‘s 2013 world conference, Digital Assassination co-author Richard Torrenzano, CEO of The Torrenzano Group, introduced a Socratic session featuring 10 impeccably-credentialed professionals, each of whom would play a role in an online crisis scenario. Four represented the C-suite of a fictional company. Retired Greenpoint Financial CEO Thomas Johnson was the CEO, Asta Funding CFO Robert Michel was the CFO, Morgan Stanley Wealth Management’s communications and marketing honcho James Wiggins was the chief communications officer, and Dex One investor relations VP was the head of IR. The panel also included an independent director (Frank Sorrentino, chairman and chief executive at Connect One Bank), an outside legal counsel, (Ronald Levine, partner and co-chair of litigation at Herrick Feinstein, LLP), and institutional investor (Barbara Doran, portfolio manager/wealth adviser, Morgan Stanley), a daily newspaper reporter (Diana B. Henriques, New York Times financial journalist), a broadcast and wire service reporter (Dan Colarusso, global head of programming, Reuters), and a business reporter who also blogs (Aaron Elstein, Crain’s New York Business Wall Street reporter).

The scenario was simple and familiar: a skin care company found its long-standing flagship product under attack on the web. The report alleged the product contained a carcinogen and a photo claimed to depict a woman whose face was living proof of the damaging effects of the cream.

During the session, Torrenzano took the panel through a series of revelations and news announcements as the story continued to spread online. How would the institutional investor react? The media? The external directors?

It became clearer and clearer during the course of the session that the company leaders were essentially clueless about how to address the challenge. Ultimately, it took hours for the company to issue any statement at all. Why so long? There was nobody on the panel pointing out that the company’s customers, many of whom undoubtedly look to authoritative spa and beauty bloggers and other online influencers in the space, were undoubtedly hungry for information. In the absence of any statement from the company, these would have become the de facto primary information sources.

Nobody on the panel (or the moderator) noted what the spa and beauty bloggers were saying. Nobody was assessing the sentiment of the conversation among customers and target consumer audiences. The focus was squarely and 100% on traditional media and investors. It was as if customers themselves have no voice or influence at all. As the investment manager hangs in there based on trust in the company’s leadership, then considers divesting the fund of some of its investment in the firm, influential bloggers, YouTube stars and others most likely would have been spreading panic, particularly when noting that the company has been alarmingly silent.

As organizations as diverse as Ford Motor Company, the healthcare network Scott & White, and the Centers for Disease Control and Prevention have shown, it is vital to enter the conversation immediately, if only to acknowledge awareness of the issue and let people know when to expect more. All three organizations also provided updates frequently, even if it was only to let people know they were still working on it. The effect of the regular updates was to tamp down speculation and minimize the impact of third-party commentators.

No social media expert on the panel meant no counsel to respond appropriately. I may have missed it while I was taking notes, but I didn’t hear the words Facebook or Twitter uttered once.

But it didn’t stop there. The first member of the audience to pose a question asked, “What are you communicating to your employees?” That’s right, nobody on the panel—not even the chief communications officer—addressed the most important organizational ambassadors: staff. In the real world, most employees with social media accounts (which is most employees) identify their employers in their profiles. They would undoubtedly, as awareness of the cancer report spread, be bombarded with questions from people in their social graph. What could they say? How could they help? Clearly, that wasn’t much of a factor among the senior leaders on the panel. Not only was communication to employees not a consideration, neither was the notion of a social enterprise where trained employees are viewed as an organic and natural part of the communication landscape.

While the format and presentation of the panel was outstanding (if you’re hosting a conference, this Socratic dialogue approach is one worth your consideration), it ultimately taught us more by who wasn’t on the panel and illuminating how uninformed company leaders remain about the impact of social media.

As commentary multiples supporting the demise of the social media manager, this little glimpse into the reality of the C-suite demonstrated exactly the opposite. Without focused counsel, leaders and executives who believe they know how to handle a crisis could be guiding their organizations down the road to disaster.