Three Hard Truths About Email Most Executives Overlook
By Small-Cap Institute
This was adapted from an advisory bulletin recently written by the chair of our editorial advisory board, Adam J. Epstein.
Most disastrous boardroom situations have three things in common: (1) email; (2) impaired reputations; and (3) they were completely avoidable.
Email has been around for a long time, so you’d think that smart, seasoned executives wouldn’t misuse it. You’d be wrong.
Most small-cap leaders don’t know at least one of the following and have paid – or will pay – the price for it.
Attorney-client privilege Part 1. Copying your emails to counsel does not guarantee that the email you just sent to your board colleagues is privileged, unless you are seeking legal advice from counsel in that email.
Attorney-client privilege Part 2. Even if you request legal advice in an email to a board colleague and counsel, that email also won’t be privileged if you copy a third-party. That is, it’s called “Attorney-Client Privilege” not “Attorney-Client-Intern at your PR Firm Privilege” for a reason. This is a common occurrence, and corporate lawyers rarely take their clients to task for it.
You might be asking the wrong lawyer. As every lawyer can attest to, there are many otherwise high-quality corporate attorneys who don’t know a lot more about attorney-client privilege than you do. If you’d like a lawyer to advise your management team or board about privilege – which you should do – consider asking a litigator.
Considering that there are lawyers who don’t even understand attorney-client privilege, the best rule of thumb for board members is to use email for scheduling and logistics and use the phone for everything else. The same rule applies to texts.
If you’re unconvinced, spend some time together with board members who lost months of their lives being deposed by plaintiff’s attorneys, by the Justice Department, and/or by the SEC for sending emails and texts that simply sounded incriminating but weren’t.
If you’re still unconvinced, at least consider doing this: prior to sending any substantive email or text to a board colleague, read it out loud while imagining that it’s going to be printed in a NYT story subsequent to your company announcing an accounting restatement.
The easiest way to spot savvy public company board members is that they rarely send substantive texts or emails. When in doubt, pick up the phone.