Financial Post: Carol Hansell Comments on Director Resignation

From the Article:

The sudden resignation of longtime Royal Bank of Canada director Joao Pedro Reinhard, who faces a drug-related charge, should mitigate “reputational contagion” at Canada’s largest bank, corporate governance experts say.

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Carol Hansell, a partner at Hansell LLP, a law firm specializing in corporate governance, said she could not speak specifically about the case at RBC. But she said it is not unusual for a couple of weeks to pass between an allegation of improper conduct and definitive action by a board of directors.

“Giving an individual time to take whatever action they need to [take] to make sure this is a matter that is not going to go away, I don’t think that’s unreasonable,” Hansell said.

In addition, “it takes more than a moment for the organization to be thoughtful about how to deal with things.”

When faced with accusations of conduct by a director or an executive that is inconsistent with the franchise or reputation of the organization, Hansell said boards must weigh whether the alleged conduct compromises the ability of the individual to do their job. A company must also look beyond board function to “reputation management,” she added.