Practical insights for boards of directors in the time of COVID-19

The COVID-19 pandemic has created unprecedented uncertainty for all participants in the U.S. and global economy. To stem the spread of COVID-19, many local and national governments have issued significant restrictions on public activity, including travel restrictions, social distancing mandates, stay at home orders and other containment policies, which have caused many businesses to adjust their operations or close their doors.

As governments begin to ease restrictions and businesses begin to re-open their physical locations, a different set of considerations for companies has emerged. While companies continue to focus on the safety and well-being of employees, customers, suppliers and other stakeholders during this time, the decisions to be made regarding how and when to re-open and bring employees back to work are complex and often involve balancing the needs of different stakeholders.

In such times, the board of directors of a public company plays a critical role in overseeing management and guiding the company through the disruption and uncertainty. Many companies will face litigation related to COVID-19, whether merited or not. Therefore, ensuring that the board of directors has the necessary information to fulfill its fiduciary duties, including its oversight responsibilities, and properly documenting board actions are even more important in the current environment.

This article will first briefly overview directors’ fiduciary duties in the context of COVID-19 and then outline a number of practical tips and recommendations, including:

  • The potential use of a committee to spearhead the board’s oversight of COVID-19-related issues;
  • Strategies for keeping the board informed, including regular and special meetings, informal updates, written materials, and the use of outside legal and subject matter experts; and
  • Tips for robust documentation of board activity, including drafting minutes that highlight the directors’ active participation and include the appropriate amount of detail without waiving legal privileges.

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