May 1, 2020
Authored by: Vicki Westerhaus, Hope Goldstein, Sara O'Keefe and R. Randall Wang
As states slowly move to reopen their economies, many returning employees will be shocked by the radical changes in their workplaces. Collaborative spaces, ping pong tables and community break rooms, among other areas, will be transformed or closed for social distancing. Employers will monitor and collect employee health information as never before. Some employers already have announced they are exploring contact tracing and testing apps and wearable wristbands to alert employees if they are within six feet of each other or have come into close proximity with someone who has tested positive for COVID-19.
Directors will play a crucial role in overseeing these pandemic-related corporate culture and privacy challenges, far beyond typical oversight of operations and finance. Directors have duties of care and loyalty to make well-informed decisions and act in the best interest of company stockholders. To fulfill those duties and protect themselves under the business judgement rule, directors should require management to provide appropriate and timely reports so they can monitor and consider up-to-date information in order to provide strategic direction and oversight in the rapidly-changing COVID-19 environment.
While there is always tension and management sensitivity about possible board over-reach into day-to-day operations, management and directors may need to work together more closely than in the past so that directors are fully informed in order to monitor management’s real-time decisions to re-open while fulfilling their oversight duties.
Conflicts in workplace protocols are likely, as management and directors grapple to balance risks and uncertainties with employee and customer privacy