On May 18, 2020, partners Michael Albano and Jennifer Kennedy Park participated in a webcast hosted by The Conference Board entitled “Reopen Ready: Managing Governance and Legal Risks in the New Normal.” Michael Ullmann, Executive Vice President, General Counsel of Johnson & Johnson, also participated on the panel.
The panelists and moderator Paul Washington, Executive Director of The Conference Board ESG Center, began by discussing the challenges that different types of businesses are facing, ranging from essential businesses that have remained open, but are transitioning operations to non-essential businesses that are reopening after sustained closures and everything in between. The panel discussed key takeaways from the current climate that businesses of all types should consider when preparing to adjust to “the new normal.”
As a preliminary takeaway, the panelists agreed that for all businesses, flexibility is key. The regulatory, business and public health landscapes are evolving so any response to COVID-19 must empower the company to adapt to new circumstances. Additionally, frequent, written and clear communication of company policies and procedures is a crucial component of any company’s plan to address the impacts of COVID-19 on business operations. This includes communication with employees, the Board of Directors, customers and other stakeholders. The panelists noted that the business environment will dictate many components of a company’s response, including geographic footprint and size. Regarding timing, it’s never too early to start putting a plan in place and it’s important that companies begin taking steps to document and implement a formal plan as soon as possible. Lastly, corporate responsibility was a key vantage point though which the panelists discussed important policy adoptions and legal risks, noting that companies should consider the impact of their response on employees, customers and the community environment within which they operate.
Implementing a CDP
The panelists then discussed the importance of implementing a formal plan to guide the reopening process, including adopting a Communicable Disease Policy (“CDP”) that is tailored to address challenges brought on by the COVID-19 pandemic. Any plan that a company devises should be in writing. The plan should incorporate input from key stakeholders, including employees, landlords and facility managers and should contain an employee-facing document that outlines the steps the company is taking to preserve and promote employee health as well as the steps employees must take in order to safely return to the premises, including agreeing to undergo screening and abide by health and safety protocols. The panelists also discussed some of the key elements of a CDP. These include phased returns for employees, changes to physical premises that facilitate social distancing and frequent sanitization, health and hygiene policies, protocols for handling sensitive information when conducting medical screenings and mechanisms for monitoring and enforcement. Additionally, the panelists agreed a CDP must incorporate protocols for handling employees who fall ill, including contact tracing, quarantine measures and applicable sick leave policies.
The Role of the Board of Directors
The panelists discussed the role of the board in responding to the COVID-19 crisis as two-fold. First, the panelists emphasized the importance of setting the cultural tone at the top and communicating alignment with management. As employees navigate increasingly uncertain circumstances, communicating both empathy and vigorous commitment to protecting health and safety can go a long way to assuage an anxious workforce and mitigate some of the legal risks that arise from distrust and unrest (e.g., whistleblower complaints).
Secondly, the panelists noted that given the current climate, balancing the Board’s oversight duties with the reality that management is responsible for day-to-day operations may lean towards increased engagement. Implementing regular reporting systems, designating committees or members with specific responsibilities and creating opportunities for the Board to harness its diverse expertise areas to review and enhance the CDP can enhance the effectiveness of company policies and mitigate the risk of Caremark claims.
Managing Reopening Risks
The panelists gave an overview of legal risks that a company can prepare for including compliance with an evolving set of laws and regulations, negligence claims arising out of injuries incurred by employees, customers and third-party stakeholders, as well as discipline and enforcement risks related to wrongful termination claims, allegations of discriminatory treatment, labor unrest and privacy issues, among others. Additional, non-legal risks that the panelists discussed relate to managing employee stress and mental health as individuals adjust to new circumstances and considering long-term operational changes that a company might undergo to keep employees safe and remain competitive.
Finally, the panelists wrapped up their discussion by giving an overview of lessons they believe companies should take away from the current climate, concerns that they have about how companies will navigate risks in transitioning to “the new normal,” and reasons for optimism moving forward. The panelists agreed, they’ve all been inspired by the adaptability and resiliency of the human spirit, which has been put on display by the healthcare workers diving into crisis zones, children adapting to new learning environments and companies striving to prioritize safety for customers and employees alike.
A replay of the webcast is available here (please note that your browser may require you to run an Adobe plugin to access this content and account registration is required).