If your company or clients are among the ever-growing group of businesses that are looking to exit Russia following that nation’s invasion of Ukraine, you may want to take a look at this two-part guide to the decision-making process from The Conference Board. The first part reviews the actions that companies have taken to sever ties with Russia, provides advice on developing a clear and consistent decision-making framework, and offers guidance on how companies can prepare for situations involving violations of international law and human rights.
The second part focuses on disclosure & communications and discusses compliance with SEC disclosure requirements and corporate communications policies to describe the actions they have taken. Here’s an excerpt about some of the things to consider when corporate disclosures that go beyond regulatory requirements:
Many companies that have or had operations in Russia have engaged in communications other than those required by the SEC, such as statements by management and social media postings designed to communicate the companies’ commitment to corporate purpose, corporate citizenship, and other values underpinning their decision to suspend or continue operations in Russia. These statements can also serve other purposes, such as demonstrating that the decision to leave or not leave Russia is consistent with short- or long-term strategy.
However, these communications do not stand alone; they need to be considered in the context of SEC requirements and prohibitions and must also be consistent with the company’s communications policy. Among other things, companies should align their informal communications with the information in their SEC filings, as inconsistencies may raise comments from the SEC or subject the company to liability.
The content of informal communications, as well as their preparation, review, and dissemination, needs to be handled in accordance with the company’s communications policy. These internal policies, many of which reflect the requirements of SEC Regulation FD, often require reviews by specified individuals or groups, indicate who is authorized to speak for the company, and direct members of management and the board—and in some cases all employees—that any questions from the media or otherwise must be referred to a designated spokesperson.
Adhering to these policies will help make these communications “consistent, appropriate in tone, and reasonable in terms of time horizon and other factors.” He also points out that companies need to monitor developments so that their communications remain relevant and reflect reality. Above all, he says that companies must keep their boards informed so that they can provide appropriate oversight to the communications process & suggests that boards review these communications before they are issued.
Be sure to check out our “Ukraine Crisis” Practice Area for resources dealing with disclosure, sanctions compliance and other issues associated with the crisis.
– John Jenkins