Sullivan & Cromwell's "Disclosure Considerations—Senior Executive Illness Due to COVID-19" is a must-read for those charged with evaluating whether, when and how information about the company should or must be disclosed and those involved with monitoring and evaluating potential changes to insider trading policies, blackout periods, and insider group participants. The memo discusses key considerations relative to determining whether to voluntarily disclose a senior executive's or multiple executives' COVID-19 suspected or confirmed diagnosis. The unique circumstances surrounding COVID-19 - including the increased likelihood of information being leaked and the communicability of the disease to others - may very well trigger a different disclosure decision than the company may make in the future or may have made in the past concerning an executive's illness or health issue.
Assuming a decision to voluntarily disclose, the memo identifies a number of legal and practical disclosure considerations including format, substance, timing, updates, and personal privacy. Finally, as noted in last week's Society Alert (see "Review Insider Trading") and here, insider trading risks are particularly heightened in the context of potential or known coronavirus impacts on company performance and key personnel.
See our prior report: "Disclosure of CEO Coronavirus Infection?"; Century Cobalt's reported 10-K filing delay due to its CEO being isolated for COVID-19; BT Group's Form 6-K disclosure of its CEO's diagnosis; these WSJ articles: "Altria Group CEO Howard Willard Has Coronavirus, Will Take Leave" and "Boards Are More Likely to Review Temporary Succession Plan Amid Pandemic"; Vinson & Elkins' "My CEO Just Tested Positive, Now What?"; and additional resources on our CEO Succession page. This post first appeared in the weekly Society Alert!