Hidden inside Fortune’s 2008 Investor’s Guide is a one page article titled “The Three Minute Manager: Lessons In Leadership.” They interview Bill George (True North), Noel Tichy (Judgment) and Jeffrey Sonnenfeld (Firing Back) and each was asked questions around the problem:

“What do you do if you discover a huge loss at your company?”

There is no link on the Fortune’s site to the piece, so I can only give you the choicest words from each authority:

• Sonnenfeld on your first move: “First you want to figure out the entirety of the problem so you don’t lose credibility coming out with more and more bad news. Determine how much time you have to analyze the extent of the situation before you release information to the public.”
• George on taking responsibility: “Do everything you can to avoid denial. There’s a tendency in many organizations to not want to hear bad news. I used to say at Medtronic, ‘You will never get fired for making a mistake, but you will get fired for covering it up.’”
• Tichy on who’s done it right: “Jack Welch was a master of crisis management. In the 1980′s a GE engineer was caught bribing a Israeli general, and Welch himself fired 20 other GE managers because they should have smelled it. They were the ones stealing, but they got fired for it. Welch personally owned that.”