More Corporate Director Involvement Expected in 2019: Report
Akin Gump Strauss Hauer & Feld's annual forecast outlined the top 10 most important topics facing corporate directors and counsel in the upcoming year.
December 19, 2018 at 03:00 PM
3 minute read
In 2019, company leaders must be more engaged, stepping up to establish the business' culture and values from the boardroom down.
That's the message of Akin Gump Strauss Hauer & Feld's annual forecast outlining the top 10 most important topics facing corporate directors and counsel in the upcoming year. While the list includes some perennials such as cybersecurity, some issues that are unique to 2018—the #MeToo movement and the midterm elections, for example—also make the list.
But most, however, generally involve increased responsibility on the part of directors and their in-house lawyers, said Christine LaFollette, partner in charge of Akin Gump's Houston office and a member of the cross-practice, four-lawyer team that drafted the 2019 report.
“We can't be reactive,” she said. “We have to be proactive, with the GCs being able to tell their boards, 'This is the exposure we face: criminal liability, reputational harm and maintaining customer relationships, your workforce and an economy that depends on corporate planning and success.'”
LaFollette added: “This is something that is worthy of a lot of thought and discussion in boardrooms with management and with legal counsel.”
One sign of corporate culture, which “starts at the top, with the board of directors,” is the company's preparation and readiness for a crisis, according to the report.
“Eventually, a crisis will occur, and a board cannot wait until that day to decide how to handle the situation,” it said. LaFollette added that such preparation should, in some cases, extend even to the point of performing dry runs.
In addition to corporate culture, board diversity, and corporate strategy, the report noted that “a responsible board should anticipate the possibility that allegations of sexual harassment may arise against a C-suite or other senior executive.” It added that directors must also be aware that social issues were at the forefront in 2018.
“Corporate social responsibility is taking on another level,” LaFollette said, noting that in the last year these issues have included immigration reform and human trafficking.
Alongside keeping up with social issues, the report noted that boards will also likely face more regulatory work in the months ahead.
Boards may have more involvement resulting from actions by the regulatory agencies such as the federal Securities and Exchange Commission and U.S. Department of Justice, including regulations and sanctions, as well as from investigations by Congress as a likely result of the midterm elections, LaFollette said.
“In fairness, the GCs are going to be spending a lot of time keeping the board up-to-date and maneuvering through the legal reports and requirements that come out of Washington,” she said.
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