McGuireWoods London associate Adam Penman was quoted in an April 9, 2020, Personnel Today article on how organizations can prepare for when their leaders fall ill and must self-isolate or be hospitalized, like the many who are infected with COVID-19.
According to Penman, it is vital that businesses have contingency plans in case senior managers are unable to fulfill their roles.
“The risk is that, if life events take over, a business could be perceived as less stable or effective without a robust succession plan which shareholders are convinced will work,” said Penman. “It is always good to be transparent about the existence of such a succession plan, if not the detail. For example, for publicly listed companies, this could be included in their prospectus or annual report.”
Penman added that it is crucial for companies to relay to stakeholders how they will handle issues that arise while a member of senior management is absent.
“Companies must have a strategy to communicate to investors or other stakeholders any new reality and how they are dealing with it, whilst simultaneously respecting the privacy of the individual and their family,” Penman said. “This will be especially important when a particular high-profile individual is intrinsically associated with that company or is the ‘face’ of that business.”