When it comes to society-wide initiatives growing in popularity, sustainability has an outward focus, while environmental, social and governance (ESG) issues have an inward focus.
William G. Passannante is a shareholder and co-chair of Anderson Kill’s insurance recovery group and also spoke during the two-hour webinar on ESG. Passannante noted the evolution of corporate governance from shareholder primacy, advanced by Milton Friedman in 1962, to a more comprehensive view comprising other stakeholders including the community, customers and employees. That was championed by the Business Roundtable in 2019.
With circumspection Passanante added that the change “complicates D&O liability.”
To that point final speaker on the webinar panel Dennis J. Artese, shareholder with Anderson Kill and chair of the firm’s climate change and disaster recovery practice group, encouraged owners to assemble their response and claims teams in advance of any losses, particularly natural catastrophe.
“Establish those relationships well in advance of the storm.”
That team should include outside coverage counsel and the insurance broker, to help ensure perspectives and expertise beyond those of the insured company. It can also include a public adjuster, structural engineer, or forensic accountant for a business-interruption plan.
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