Board risk oversight and reputation risk

Great blog here from the Harvard Law School Forum. Those that work with boards should read the entire thing but here's two key paragraphs with my emphasis added:

Take-Aways

For as long as Caremark continues to be the law, directors should ensure that they at least meet the Caremark standard in connection with the #MeToo movement and other issues relevant to their businesses, but they should not be too concerned about new liability risks, even in the current environment. Meeting the Caremark standard includes periodically assuring that there is a system for information and problems to come to the board’s attention. The application of the Caremark standard to today’s issues does not require novel efforts.

However, reputational risks for companies and directors, distinct from liability risks, deserve to be highlighted in the current environment. The enterprise risk approach that many companies and boards take should be re-examined to ensure that they are designed so that reputational risk concerns will bubble up to the board. In our experience this adjustment has already happened at many companies.