Do Directors Commit Dereliction Of Duty By Failing To Prepare For Bird Flu?

I tell you what, I suspect most directors of companies are like me in that concerns about being wiped out by bird flu fall somewhere behind fear of UFOs at the Chicago airport and anxiety over the possibility of encountering shirtless rednecks on the corner brandishing boorish accouterments like accordions and doing some kind of Irish lord-of-the-dance step. 

So I enjoyed this post at the D&O Diary about the hype over possible director liability for failing to prepare adequately for avian flu.  The post contains a link to an overdramatic story that concludes with this paragraph (access to the story involves a fairly painless registration):

Directors could find themselves targeted in lawsuits for dereliction of duty. Attorney Mark Mansour, a Washington, D.C.-based partner in the public-affairs practice at Foley & Lardner, points out that Sarbanes-Oxley requires boards to take into account almost every conceivable problem that could put the company in jeopardy. “Not acting to impel management to create a pandemic plan when there’s been all this publicity could be viewed as a lack of fiduciary exercise,” he argues. Adds Kathleen Scott, an attorney with White & Case in New York City: “If the business has trouble functioning, you could have shareholders saying, ‘Why wasn’t there a plan in place?’ You aren’t going to be able to say you hadn’t heard about it.”

Riiiight.  Nice try, but let’s get real.  When the bird flu hits, we’ll all be dead: who’s going to be around to file suit, some pigeons?  More importantly, what contingency plans do the boards have in place about flying saucers and guys wearing farmer pants obstructing a public right of way? 

 

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