Brent Ashley Publishes 7 Steps To Ensure Director Oversight, D&O Diary

06.05.2020

On June 4, 2020, Brent Ashley's “7 Steps To Ensure Director Oversight Amid COVID-19” was published by D&O Diary.  

A 2019 decision by the Delaware Supreme Court elaborated on the standard of conduct required by a director under her duty of oversight when it found that Blue Bell Creameries USA, Inc. failed to try to implement a reasonable system to oversee issues "intrinsically critical to the company's business operation," noting the Blue Bell board minutes reflected "no board-level discussion" of contamination reports on its products. This ruling provides a standard for oversight that there must be board-level efforts to have oversight of mission critical issues in mind. To help meet this standard, Ashley provides a 7-step checklist for directors, including:

1. Identify, evaluate and regularly update "intrinsically critical" compliance issues.

2. Designate a board committee specifically charged with overseeing pandemic-related matters and evaluating how these concerns impact "central compliance" issues.

3. Confirm the implementation of protocols requiring senior management to provide regular updates and reporting to the board about the impact the virus is having on company operations, financial positions, compliance risks and COVID-19 response.

4. Develop a crisis response plan centered on preventative measures.

5. Hold virtual board meetings often, and add COVID-19 concerns to the agendas.

6. Record detailed COVID-19-related actions and deliberations in board committee and full-board meeting minutes.

7. Maintain documents relevant to and evidencing the existence of reasonable reporting and monitoring systems.

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