Reputation Insurance Secures…

“What did you think about the drama at Cracker Barrel?,” asked the Chief Legal Officer?

‘I’m mixed on it,” replied the CEO. “I take some comfort in the fact that 75% of their shareholders backed the CEO staying on the board.”

“She was in activists’ cross hairs and survived,” said the CLO.

“Yes, but the other activist target — a board member and longtime marketing and diversity specialist — failed to receive enough votes to satisfy Cracker Barrel rules, and resigned.”

“Around 60% of shares cast were in opposition to him,” said the CLO. “It’s shocking how fast things change. Both of them had received roughly 98% of shares voted at last year’s annual meeting.”

“Is this one more red flag for up-and-coming directors?” asked the CEO. “The Nom-Gov chair sent me an article on how fear of public humiliation is discouraging new potential directors with critical skills.”

“Well, yes, I think so,” replied the CLO. “Cracker Barrel was just one case. Susan from Investor Relations and I have looked at the data trends.”

“I’m listening,” said the CEO.

“Headline 1,” the CLO continued. “Activists are frightening boards into rapid submission. In the second quarter of 2025, the average settlement time with activists was 16.5 days.”

“Board’s settled in just 16 days?” repeated the CEO

“In Q1, a bit longer at nineteen days,” added the CLO. “This is almost a five standard deviation reduction from the 70.5 day average between 2015 to 2022, and a 90% faster rate than the 166 day average of 2008 through 2015.”

“Sixteen days is not the model of good governance,” said the CEO. “That’s just a set up for a fiduciary case from a different set of investors.”

“Susan and I agree. It’s a setup,” said the CLO.

“There’s more, right?” asked the CEO.

“Yes,” said the CLO. “It is, as you suspected, affecting new promising directors.”

The CEO grimaced. “Give me the headline for this one.”

“Headline 2,” the CLO said. “Directors with diverse backgrounds are not being placed: Appointments of first-time directors in 2025 who self-identify as underrepresented minorities declined by 38% from 2024.”

“38% down,” repeated the CEO.

“Diverse directors, including women in the new S&P 500 class, declined by 22% from 2024,” added the CLO.

“The S&P500,” repeated the CEO, “I thought directors at those companies were impervious to activists…too big to assail, and all that?”

“Not anymore,” said the CLO. “According to the Conference Board, the chances of a board of an S&P500 company being targeted is now material. Six of every 100 campaigns in 2024 targeted those firms.”

“Hmm,” reflected the CEO. “So, the $190 million settlement by Meta Directors to end their fiduciary lawsuit was not an outlier?”

“It was one of the largest,” said the CLO, “but activists are hunting with elephant rifles.”

“Is there more?,” asked the CEO.

“Yes, I want to move the conversation to something actionable,” said the CLO.

“Thank you,” the CEO said. “Go on.”

“Headline 3,” the CLO said. “There’s a surge in reputation insurance interest.”

“Reputation insurance. For boards?” asked the CEO. “I thought that insurance was for PR or something like that.”

“There’s a new product for Director’s and Officers who are concerned that their reputation might be damaged through board service…like the diversity specialist at Cracker Barrel,” said the CLO.

“Are people really interested in D&O reputation insurance?” challenged the CEO.

“Yes,” replied the CLO. “In the trailing 12 months from November 23, 2025, internet searches for reputation insurance jumped almost 900% over last year. More than 4000% greater than they were five years ago.”

“D&O reputation insurance?” repeated the CEO.

The CLO nodded. “There’s a product called Side R^® D&O parametric reputation insurance that protects directors and officers from the opportunity costs that might come from public humiliation and being voted off a board. They say it can help attract and retain qualified board members.”

“There’s really an insurance product for this problem?” asked the CEO in disbelief.

“Yes,” replied the CLO. “It’s one of the new products the insurance industry has come up with that is actually useful.”

“How expensive?” asked the CEO.

“Reasonable price, but here’s the kicker,” said the CLO. “Susan told me that companies that publicize their reputation protection strategies get meaningful market cap boosts.”

“The CFO concurs?” asked the CEO?

“Yes. The data shows an average bump of about 4% persisting after 3 months,” said the CLO.”

“That doesn’t sound like much,” the CEO countered.”The markets are soaring.”

“I wasn’t clear,” the CLO added. “That’s 4% above market peers. Its actually about 9% above the S&P500 index.”

“I like this,” said the CEO. “Side R, is it?”

“Side R Reputation Insurance,” replied the CLO.

“So,” said the CEO slowly. “We can build a governance strategy around Side R, publicize it, give our board assurance we care, attract the key board talent we need, and boost our equity?”

“That’s what the data indicate,” replied the CLO.

“See if you can get Susan to join us,” said the CEO. “And let’s get this Side R Reputation Insurance strategy into our plan for the new year.”

With reputation risk forecasting, management, and insurance, Steel City Re helps companies build and prove to stakeholders their thoughtful risk management and dutiful governance over all that is mission-critical. It is an authenticated story stakeholders can appreciate…and value.

Click below for a Steel City Re Reputation Resilience Monitor for Cracker Barrel