Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Author: Scarinci Hollenbeck, LLC
Date: May 26, 2020
The Firm
201-896-4100 info@sh-law.comMany financial institutions, broker-dealers and registered investment advisers follow industry best practices and regulatory guidance to include succession planning and a written succession plan as an integral component of the entity’s Business Continuity Plan (“BCP”) or Disaster Recovery Plan (“DRP”). Past natural disasters and unexpected emergencies have savagely elevated the consequences of such events to federal, state and local governments, and both non-profit and for-profit businesses, charitable organizations, as well as closely-held family enterprises, law and accounting firms.
Succession plans have been considered a critical aspect of effective corporate governance. However, many firms and companies, particularly small businesses, don’t have a well-defined, written action plan to follow when planned and unplanned changes in leadership occur.
What will happen if your CEO or other key members of your firm’s C-suite management team contract coronavirus (“COVID-19”) and can no longer participate in the management and supervision of the company? Unfortunately, the ongoing pandemic has shown that no one is immune, including CEOs, top corporate officers, individual members of the Board of Directors or their trusted advisers/consultants or key parties of vendors/service providers. This pandemic illustrates how quickly disease can spread and over long periods of time where asymptomatic individuals are virus spreaders. ‘Business’ life, until now, has been a uniquely directly interpersonal “social” one involving personal contact, meetings, travel, and varied measures of socialization in both small and large groups in myriad environments. It’s imperative to have a Succession Plan in place to address the temporary (or even permanent) loss of key members of your company’s management team or others that are relied upon for key functions and advice.
There is no magical “one size fits all” succession plan. Nor is there an immutable founder/CEO. Rather, each firm’s plan must be tailored to the entity’s particular management structure and specific requirements of the organization operating in its industry and sector. There are several general considerations that can enable the succession planning to create a plan that is effective during a crisis.
A well-developed succession plan ensures continuity in the management and operations of the company should a key player (or multiple high-level officers/managers) no longer be able to perform his/her or their duties. The Plan is also integral to maintaining the confidence of investors, business partners, lenders/creditors, clients, and staff.
As the COVID-19 crisis highlights, it is difficult to predict when and how a succession plan may be required. However, a plan is mandatory and immediate attention should be paid to its current conditions. To protect your business, it is essential to have a comprehensive plan in place before you need it.
If you have any questions or if you would like to discuss the matter further, please contact me, Paul Lieberman, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Author: Angela A. Turiano
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Author: Dan Brecher
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
Author: Robert E. Levy
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
Author: Christopher D. Warren
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Author: Dan Brecher
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Author: Bryce S. Robins
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!