Take-Aways for Boards of Directors from the COVID-19 Pandemic

Take-Aways for Boards of Directors from the COVID-19 Pandemic

The COVID-19 pandemic has tested businesses’ ability to respond to a crisis and deal with internal and external consequences. Many boards have effectively overseen companies through these extraordinary circumstances, guiding and adapting crisis management plans. Additionally, communications and transparency between boards, management, shareholders, and employees have been tested.

Retirement Ages for Board Members

Retirement Ages for Board Members

Although the United States generally does not mandate retirement at a certain age, specific industries and occupations have such requirements, including for airline pilots. Statistics show that 63% of workers retire between the ages of 57 and 66, with 62 as the minimum age to collect social security.

The Delaware Chancery, Supreme Courts, and Their Importance

The Delaware Chancery, Supreme Courts, and Their Importance

Rulings from the Delaware Court of Chancery and the Delaware Supreme Court have become the foundation for corporate law and a critical guide for corporate governance. Over one million businesses today list Delaware as their legal home, including roughly two-thirds of the Fortune 500. It has been the principal state where businesses have registered since the early 1900s.

The Compensation Committee of a Board of Directors

The Compensation Committee of a Board of Directors

Oversight of management is one of the board of director’s primary responsibilities. This includes hiring, monitoring, evaluating, and compensating the senior team. Most boards establish a compensation committee to be responsible for this important topic. Often, the committee retains an independent compensation consulting firm for advice. 

Environmental, Social, and Governance Issues

Environmental, Social, and Governance Issues

Environmental, social, and governance (ESG) are three related pillars of criteria used to assess a company through the lenses of ethics and sustainability. The term was first coined in a 2005 study examining these three criteria as value drivers for a business. ESG factors are increasingly considered in investment and governance decisions and span a full spectrum of issues not traditionally part of financial analysis but that may very well have financial relevance. While so-called ESG investments total tens of billions of dollars, this understates ESG’s impact, as institutional investors such as BlackRock are increasingly demanding enhanced actions and reporting on ESG topics.  

The Board and a Corporate Crisis

The Board and a Corporate Crisis

In its capacity as a fiduciary for shareholders that oversees a company, a board of directors should be prepared to effectively oversee the response to an extraordinary circumstance or crisis that can potentially very negatively impact a business. Crisis management can differ depending on the event in question. Regardless, a detailed crisis management plan developed by management and approved by the board should be “on the shelf” and “rehearsed” to address such value-threatening and potentially life-threatening situations.