Legal considerations when advising on business continuity

Area of Science:

• Business Law
• Risk Management
• Corporate Governance

Background:

• Increasing climatic concerns and cybersecurity incidents necessitate robust business continuity measures.
• Stakeholders, including shareholders, regulators, and contractual parties, expect proactive investment in business continuity.
• The US legal system provides mechanisms for enforcing accountability for business continuity failures.

Purpose of the Study:

• To explore the US legal system's role in enforcing business continuity.
• To examine legal liability for decision-makers and contractual parties regarding business continuity plans.
• To provide business continuity professionals with legal knowledge for planning and incident response.

Main Methods:

• Analysis of US legal precedents and statutes related to business continuity.
• Examination of shareholder derivative lawsuits and breach of contract claims.
• Review of legal doctrines excusing contractual performance due to disasters.

Main Results:

• Shareholder derivative lawsuits and breach of contract claims are key legal tools for enforcing business continuity.
• Failure to implement adequate business continuity plans can lead to significant legal liability for corporate officers.
• Disruptions may legally excuse full contractual performance, impacting supply chain obligations.

Conclusions:

• Business continuity professionals must understand legal liabilities and contractual implications.
• Proactive business continuity planning is essential to mitigate legal risks and ensure operational resilience.
• Legal frameworks support accountability for corporate decision-makers and contractual parties in managing disruptions.