Boards said to play greater role in crisis planning

Boards are increasingly driving companies’ crisis planning to deal with potential ethical, financial reporting and cyber-security problems, according to industry professionals.

Doing so is both a good governance requirement and a sensible step to mitigate directors’ personal liability risk, Jane Shapiro, senior vice president and national practice leader for corporate and crisis communications at Hill+Knowlton Strategies Canada, told attendees at the Governance Professionals of Canada (GPC) annual conference in St John’s, Newfoundland last week.

Boards don’t necessarily need to be involved to a greater extent than ensuring preparation is happening within the company, but they should ensure a crisis-planning exercise takes place at least once a year to account for changes to the plan and the executive team, Shapiro said.

She added that, during a crisis, boards’ needs include:

• Being kept informed on a regular or constant basis
• Having a clear understanding of the public relations strategy and the board’s role within it
• Understanding the extent of the company’s exposure
• Having one point of contact on the matter – with the corporate secretary being a sensible choice
• Having separate legal representation, if necessary.

Fellow panelist Lawrence Ritchie, partner with Osler Hoskin & Harcourt, outlined the legal team’s role during a crisis, which he said includes: monitoring the process to see what went well; determining the facts and causes of the event; looking at internal policy duties, compliance and insurance; and reviewing having an input on communications.

Ritchie and Shapiro’s presentation also included a series of tips for corporate secretaries and board counsel:

• Familiarize yourself with the crisis plan
• Work with management on crisis drills
• Liaise with management on planning and execution
• Ensure the board is aware of planning activities
• Keep the board apprised of actions during an incident
• Support the board’s activities.