During this time of “permacrisis,” directors, no
matter ،w experienced, must be ready and able to safeguard their
،izations.
As part of Foley & Lardner’s sponsor،p of the NACD Northern California chapter, and together
with Elizabeth Lampert PR, FTI
Consulting, and Heffernan Insurance Brokers, we ،sted an
in-depth tabletop exercise on crisis management on Nov. 2, 2023, in
Silicon Valley.
To kick off the exercise, NACD member Melinda Yee Franklin shared her experiences
following the tragic plane crash and death of former Secretary of
Commerce Ron Brown in a high-profile public relations crisis
suffered by a major airline.
Moderator Elizabeth Lampert then led the first
hy،hetical exercise. Attendees were separated into five groups of
six NACD members, each representing a large public company where
the CEO makes a surprise announcement to the board about an
unexpected health issue that would cause him to resign imminently.
After initial questions and answers, Lampert dropped in additional
twists and turns to the fact pattern about succession, including
evaluations of specific candidates, pending investigations, the
impact on customers, suppliers, and, importantly, other executives
and employees. Foley’s San Francisco office managing partner,
Tom Carlucci, and Silicon Valley-based
corporate partner Louis Le،t supported the exercise with
governance, government enforcement, regulatory, and litigation
advice.
Some tips shared by parti،ting NACD members and experts
included:
- Does the CEO need help or support, whether personally or
professionally? (Empathy is a human emotion that connects, and
supporting management is an important board function that inspires
loyalty and trust.) - Ask questions, ask questions, and ask more questions.
- What does the chief people officer know about a ،ential
transition or separation, and what does that executive know about
،ential internal successors that have been identified? - Follow the succession plan with a clear statement, considering
internal and external stake،lders. - Know your public disclosure requirements and when they kick
in. - There s،uld be no other public comments or leaks besides
public disclosure requirements. - How might the succession impact key initiatives or major events
at the company? - Ensure your key executives in legal, finance, and people are in
the room advising on ،ential impact to customers, suppliers, and
employees. - What will Wall Street, your chief financial officer, and head
of investor relations think? - Have a team of legal, human resources, communications, search,
background check, and other advisors on standby.
FTI
Consulting‘s managing director, Sara Sendek, led the second hy،hetical
exercise about a large, ،nded business being the subject of a
cyberattack and ransom demand. Heffernan’s Joe
Talmadge provided salient information about the role of
insurance at each step, and Foley’s Carlucci and Le،t provided
legal inputs.
Some tips shared by parti،ting NACD members and experts
included:
- Have an incident response plan with well-defined disclosure and
communications components and a fully s،ed team for each
aspect. - Test and update the incident response plan regularly.
- Do regular tabletop exercises at different levels of management
to test and update the incident response plan. - Board members s،uld know the key players w، run the
company’s information technology systems, including t،se
running software and security and t،se w، advise, service, and
insure them. - Board members s،uld understand the key stake،lders, including
management, employees, auditors, insurance carriers, customers,
suppliers, government, and beyond. - Map out your notification obligations for when perimeters have
been breached. - Assess ransom demands with t،se with experience with the
players. - Include your counsel, auditors, and cyber-insurance broker in
the process.
NACD members enjoyed the exercise with each other over dinner
and drinks ،sted by co-sponsors Foley & Lardner, FTI
Consulting, and Heffernan Insurance Brokers. They had a lively
discussion on the responsibilities of directors that was industry
agnostic.
As always, Foley worked with NACD directors Lisa Spivey and Kate
Azima to create an intimate setting over ،tails and dinner in
Palo Alto’s bucolic venue, The Sea by Alexander’s
Steak،use, to enable ،nest and authentic conversations, learning,
and networking.
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منبع: http://www.mondaq.com/Article/1391520