The Increased Need for Protection of Board Members and Executives

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Media coverage and global conflict have focused attention on business decision-making.

A number of factors – including an increase in travel domestically and internationally, cybersecurity vulnerabilities and privacy issues, and a rise in geopolitical conflict – have resulted in a greater need for security and protection for high-profile board members and executives.

According to Jim Hayes, vice president of sports and entertainment at security firm Guidepost Solutions, many board members have been thrust into the public eye because of the prominence of social media and the attention paid to major decisions affecting stakeholders. And as we have seen with recent Roe v. Wade-based protests outside of the homes of Supreme Court justices, the blowback on societal issues can often result in disagreeing parties becoming a little too close for comfort. We spoke to Hayes about the need for protection of board members and executives and additional factors that have made this a more pressing priority.

Directors & Boards: What is meant by executive protection as it relates to board members? What aspects are being protected? 

Jim Hayes: As it relates to board members as well as executives, what we mean by executive protection is really an overall security program. That means your access controls to facilities, it means your monitoring of cybersecurity and monitoring of threats against the organization. Then, from the standpoint of physical protection, that’s how you physically secure facilities, how you handle the movements of key executives. There are a lot more executives in the public eye now, thanks to a number of different factors. It could mean anything from simply the physical security of the facility to having an actual security detail, whether that be armed or unarmed, that escorts a particular executive or group of executives from place to place throughout the day. It could be protection that begins and ends in the workday. In some instances, where there’s a significant threat, it could mean 24-hour, around-the-clock protection at the workplace and at the particular executive’s or group of executives’ homes. Many of these people will have multiple residences. They will be doing business in multiple cities, both domestically and internationally, depending on the organization. It’ll be a security program that is designed to protect all the places where an executive and/or the executive’s family may be at any point in time. That is the most extreme example of executive protection, where every movement is planned out from sunup to sundown for the executive or for members of the family. If you’re thinking of an analogy, it can be like how the Secret Service protects the president and the vice president. You’re basically choreographing every movement so that you’re significantly mitigating the potential for any outside threat to have an impact.  

DB: What do you think the factors are that have led to the uptick in cybersecurity issues and privacy issues for boards? 

JH: Social media and media in general. There’s a lot more media than there is actual news right now. That is making a lot of information public that wasn’t 10 years ago. You have a CEO that is now in the public eye who doesn’t want to be. But his company may be, in the eyes of some politicians, making too much money, or their products become controversial overnight because of some of the political issues that have gone on in the United States, I think those two things are creating a notoriety level for people who are really just doing their jobs. They’re trying to help their company make money. In many cases, these companies provide critical products and services. Now, all of a sudden, they’re in the news and they’re the subject of media reports. You have people who may even make innocuous threats, threats that they would never intend or have the means to carry out. But you still have to take those threats very seriously.

DB: How about the recent increase in geopolitical conflict that we’ve seen? Do you think that’s resulted in an uptick of dangerous situations for high-profile board members? If so, what do you think some of those issues are?
JH: We’ve talked to a couple of companies that have business interests, or do business, for example, in Ukraine and Russia, and there’s a lot of other hotspots. But that’s the most widely known one right now throughout the world. You have interests who say, “Well, you shouldn’t be doing business in Russia.” There’s a lot of people taking sides here. When you’re a board member or executive of a multinational corporation, of a global company, then you may have to travel to those areas. It’s a factor. We haven’t seen it be an enormous factor here in the United States. I think there are obviously companies and multinationals based here that are doing business there and other places where there are conflicts. It’s one of those things that’s just added to the routine of planning for executive travel, planning for how you’re doing business when you have employees in a region where there’s a conflict. There’s a lot of different determinations that go into that, in terms of where employees are at, what type of industry. It is critical to having people physically there to do your business. We’ve all learned that there are a lot of things that can be done remotely over the last couple of years. So, some of that is recommending all employees stay out of certain situations until there’s a stabilization.
DB: What steps have you seen companies take that have been successful in protecting the safety of their high-profile board members and executives?
JH: It starts with a security assessment. For companies and for executives, there’s a tax benefit. IRC Section 132 states that if there’s a bona fide business-related security threat, then the costs of a security program can be excluded from the compensation for executives. What that means is that for a security program to be labeled as a necessary business expense, a company would have to conduct an independent security assessment. What does that security program include? Does that include some type of executive protection for the executive? Does it include security assessments for all the office facilities as well as personally owned facilities? Does it include protection for any other executives or employees when it comes to executive travel or even, in the case of employees, traveling to places where there may be a conflict? There’s a travel security assessment that we have for a lot of companies, and that is something that will rely on a number of outside independent sources, such as the Overseas Advisory Council, to review what the U.S. government is saying about the situation or current location, and that will guide our recommendation to the company of whether travel is appropriate, whether we believe the travel includes risks that should be mitigated or whether there are risks that can be mitigated when you’re traveling to a place where conflict is ongoing and unpredictable, such as a country like Ukraine. That’s something where we would say, “Look, this risk is not something we can mitigate.” So, your company has to decide whether it’s really necessary for you to do this.

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