No doubt most boards are dealing with unprecedented challenges related to the COVID-19 pandemic. Some boards might currently have a risk committee positioned to provide oversight of COVID-19 related issues while others might not. As directors are likely stretched for time just like everyone else — some boards are reportedly holding weekly or bi-weekly calls — a recent blog from Hunton Andrews Kurth takes a look at whether the board should create a special committee to oversee the company’s COVID-19 response.
A lot of factors will play into whether a company should designate a special committee to oversee the company’s pandemic response, including the structure of current board committees, director availability, director experience/expertise, existing committee oversight responsibilities, among other things. Here’s an excerpt from the blog:
Establishment of a Special Oversight Committee may give the board and the company a better opportunity to get the benefit of board members who collectively are best suited to exercise oversight in this unique set of circumstances. Such a committee could be composed of those board members who are in the best position to participate in conference calls frequently and on short notice.
Use of a Special Committee also would enable the board to select a group of committee members whose combined experience and expertise best qualify them to address the special challenges that the pandemic presents for the company.
In addition, the combination of more frequent board meetings and the establishment of such a committee would provide an excellent framework for providing high quality company oversight as well as a demonstrable record of such oversight, which record may be important in years to come as corporations deal with the fallout of the pandemic.
-Lynn Jokela, TheCorporateCounsel.net April 16, 2020