April 16, 2020

Business Roundtable “Principles for Reopening the Economy”

Yesterday’s NYT DealBook high-lighted notable business leaders who are advising President Trump on reopening the economy.  The column notes many of those business leaders are members of, or represent industry groups that are members of, the Business Roundtable and the BRT recently published its “principles for reopening the economy.”

Last summer, Broc blogged about the BRT statement on shareholder primacy and a commitment to all stakeholders and that statement still generates a lot of press and commentary today.  I’m not sure the BRT will get as much press this time around as it did last summer but the BRT principles are encouraging as they provide a framework for planning and preparing a coordinated response to the current crisis.

The BRT principles’ bottom line is that reopening the economy requires careful planning, that should begin now and activity restrictions should be lifted gradually as guided by public health officials.  As the effects of Covid-19 persist, without taking sides on to restrict or not to restrict, hopefully the BRT principles and framework help give some order to a recovery process that mitigates health, safety and economic problems as each seem at risk of escalating even further if not handled appropriately.

BRT endorsed the following principles:

Safety first – A recovery strategy must give Americans confidence that they can safely return to work and public spaces

Coordination – BRT encourages state and federal coordination for protecting public health and safety

The BRT says that it will be preparing a more detailed document outlining approaches to a safe recovery and revitalization and it will focus on the following issues:

– Federal guidelines helping to define public health criteria used to inform local decisions about lifting activity restrictions as well as guidelines that outline appropriate safety measures.

– Access to critical resources and supplies like testing and virus monitoring, supplies, therapeutics and vaccines.

– Vital worker and community needs including safe schools, childcare, transportation and restoration of comprehensive healthcare services.

BRT included 5 exhibits outlining its framework to address these issues.  The exhibits show how federal guidelines and states can coordinate their approach to lifting restrictions, considerations that should be taken into account for determining when and where to lift restrictions, how federal guidelines should define risk levels that guide the level of activity restrictions, examples of measures state and local authorities can take to implement federal guidelines and how the measures vary by federally defined risk levels.

Covid-19 Oversight: Does the Board need a Special Committee?

No doubt most boards are dealing with unprecedented challenges related to the Covid-19 pandemic.  Some boards might currently have a risk committee positioned to provide oversight of Covid-19 related issues while others might not.  As directors are likely stretched for time just like everyone else – some boards are reportedly holding weekly or bi-weekly calls – a recent blog from Hunton Andrews Kurth takes a look at whether the board should create a special committee to oversee the company’s Covid-19 response.

A lot of factors will play into whether a company should designate a special committee to oversee the company’s pandemic response, including the structure of current board committees, director availability, director experience/expertise, existing committee oversight responsibilities, among other things.  Here’s an excerpt from the blog:

Establishment of a Special Oversight Committee may give the board and the company a better opportunity to get the benefit of board members who collectively are best suited to exercise oversight in this unique set of circumstances. Such a committee could be composed of those board members who are in the best position to participate in conference calls frequently and on short notice.

Use of a Special Committee also would enable the board to select a group of committee members whose combined experience and expertise best qualify them to address the special challenges that the pandemic presents for the company.

In addition, the combination of more frequent board meetings and the establishment of such a committee would provide an excellent framework for providing high quality company oversight as well as a demonstrable record of such oversight, which record may be important in years to come as corporations deal with the fallout of the pandemic.

March-April Issue of “The Corporate Counsel”

We recently mailed the March-April issue of “The Corporate Counsel” print newsletter (try a no-risk trial).  The topics include:

1. A Disclosure Framework for the Coronavirus

– The SEC Weighs In

2. Coronavirus Disclosure Considerations

3. Executives in Trouble: Is Disclosure of Uncharged Conduct Required?

– Other Potential Disclosure Considerations

4. “Test the Waters for All” Means WKSIs, Too!

– What WKSIs Can Do Under Rule 163
– The “Test the Waters” Rule 163B Alternative
– Mix & Match? Rule 163B is Non-Exclusive
– Conclusion: WKSIs Should Keep Rule 163B in Mind

– Lynn Jokela