“Once rarely mentioned in court documents, reputational harm and the board’s related culpability are increasingly making their way into plaintiffs’ complaints. In fact, some 25 complaints were filed or amended in federal court that placed some responsibility at the feet of the board for a company’s reputational harm in the 12 months leading up to and including June 2019. By contrast, just six such cases were filed in the previous 12 months.Agenda
‘Companies disclose that reputation is a vital asset, that reputation is a vital concern, and then nothing is being done to protect that reputation,’ says Nir Kossovsky, CEO of Steel City Re, who first identified a similar uptick at the end of April. So when something happens that’s perceived to negatively impact a company’s standing, that’s pretty much the ‘setup’ for these suits, he explains.
The change in filing patterns speaks to the underlying recognition that protecting reputation is pivotal for companies, sources say.”
July 10, 2019
“(A)ccording to Kossovsky, directors are ‘sitting ducks’ for suits looking to hold board members accountable for reputational damage.”