A third of business travelers (34%) now have a remote work schedule and 35% of them will travel more and longer as a result, according to the Winter 2022 Global Rescue Travel Safety and Sentiment survey. In addition, 75% of business travelers have already traveled domestically for business and 27% have traveled internationally, according to the survey.
The survey, conducted in January 2022, collected responses from 1,400 current and former members of the travel risk management firm Global Rescue to determine the current state of business travel and risk.
Dan Richards, CEO of Global Rescue, says the bar for traveling to a meeting has been raised forever. “Virtual substitution for in-person meetings is here to stay. The pandemic has demonstrated productive work from anywhere, is feasible and that is leading to people taking advantage of that circumstance,” he said.
Ninety-three percent of travelers are “less or much less” concerned about travel since the height of the pandemic. Growing traveler confidence will drive more Work From Anywhere.
The biggest challenge in this evolving environment will be the ability to manage a location-independent workforce. “Managing the remote workforce will be a new challenge as unprecedented numbers of employees log in from the beach, mountains, and other places where they’ve chosen to live,” said Richards.
Employers need to make certain their duty of care legal requirements are comprehensively detailed.
“Company leaders like CEOs, chief security officers, travel managers, and human resources directors are accountable for the development and oversight of policies, programs, and logistics that protect traveling staff. They carry a duty of care responsibility to their people, to take care of them and avoid exposing them to any unnecessary or undue risk,” Richards said.
What Is Duty of Care?
Duty of care refers to a fiduciary responsibility held by company directors which requires them to live up to a certain standard of care. This duty—which is both ethical and legal—requires them to make decisions in good faith and in a reasonably prudent manner. These people are required to exercise the utmost care in making business decisions to fulfill their fiduciary duty.
Understanding Duty of Care
Duty of care is often an implicit responsibility that comes with being a company director, but it may also be part of a written contract. This duty requires them to make decisions that are financially, ethically, and legally sound. These decisions should be made after taking all available information into account. Directors must act in a judicious manner that promotes the company’s best interests.
Duty of care can, therefore, be summed up as the requirement that directors be present, informed, and engaged. They should use good and independent judgment, consult experts for their advice and trusted information, and refer to meeting minutes. They must also stay abreast of legal developments, good governance, and best practices that affect their companies. Directors should also schedule and be prepared to discuss and review things such as budget issues, executive compensation, legal compliance, and strategic direction.
Duty of Care vs. Duty of Loyalty
Along with the duty of care, the other main fiduciary duty is the duty of loyalty. The duty of loyalty is different from the duty of care because it seeks to prevent directors from acting against the best interests of the corporation or acting in such as way as to reap a personal benefit unavailable to other shareholders.
This duty requires company directors to put the fiduciary interests of the company before their own. It also imposes the responsibility to avoid possible conflicts of interest, thereby precluding a director from self-dealing or taking advantage of a corporate opportunity for personal gain. If a company director violates their duty of loyalty or their duty of care obligations, they may be ordered to pay restitution and stiff fines.
The duty of care also applies to other roles within the financial industry. Accountants and auditors are bound to and responsible for the best interests of their clients. Manufacturers are held accountable for the safety of consumers with the products they make and market.
Special Considerations
Failure to uphold the duty of care may result in legal action being brought by shareholders or clients for negligence. Courts generally do not rule on whether a business decision was a sound one or not in the case of company directors. This is known as the business judgment rule, meaning courts normally defer to the judgment of corporate executives. Instead, their main focus is on assessing whether the directors:
- Fulfilled their duty of care by acting in a reasonably prudent manner when making decisions in the best interest of the corporation.
- Conducted an adequate degree of due diligence, otherwise known as ordinary care.
- Acted in good faith.
- Have not wasted corporate assets or resources on overpaying for goods, property, or labor.
Given that courts tend to defer to the judgment of executives, it can be exceptionally hard to prove a duty of care breach. In fact, in Brehm vs. Eisner, the Delaware Supreme Court found that the business judgment rule protected Walt Disney’s board after it awarded $150 million in payments to Michael S. Ovitz for just 14 months of work as part of a no-fault termination of his employment agreement.
The court found that the company’s board exercised bad business judgment but was covered under procedural requirements by the fact that they consulted an expert before allowing Ovitz’s severance. The decision reinforced the belief that there is little shareholders can do to hold directors accountable.
