Board decision making on executive protection: considerations for directors in ensuring that the company has a properly designed, managed, and funded executive protection program.

• Author: Mintz, James B.
• Position: EXECUTIVE SECURITY

THE PRESIDENT of the international subsidiary of a major oil company is abducted by kidnappers who demand an $18.5 million ransom. The corporation agrees to pay, but before it does so the kidnappers are arrested--and the executive is found dead.

The head of a leading fashion house is gunned down on the steps of his Miami Beach mansion by a suspected serial killer, who later kills himself.

A top software industry executive, universally known as the richest man in the world, is attacked while in Brussels for a meeting with Belgian government officials on his way back from the World Economic Forum. Fortunately, the weapon of choice is a cream pie.

A leading hedge fund investor is kidnapped at gunpoint and held for a weekend at a motel not far from his office in Connecticut, before being released unharmed.

These actual incidents--involving, in order, Exxon executive Sidney Reso, designer Gianni Versace, Microsoft Chairman Bill Gates, and investor Edward S. Lampert (best known for engineering the Kmart/Sears Roebuck merger)--are well known but hardly unique examples of the kinds of physical attacks senior executives are subject to, both at home and abroad.

What can boards of directors do to help protect senior executives who, more often than not, are as much an asset to a corporation as its key products, brands, and technologies? What constitutes best practices in executive protection? What can--and should--it cost not to insure, but to ensure, a senior executive's physical safety? These are among the topics being discussed by security professionals the world over.

Executive protection, properly understood and properly practiced, isn't simple, or cheap. Once upon a time, it might have meant nothing more than hiring a bodyguard--an ex-cop or retired FBI agent burly and intimidating enough to clear a path through a crowd of rowdy protesters or irate share-holders. Special skills required? At most, some familiarity with evasive driving, a mean karate chop, and perhaps the ability to shoot--and license to pack--a gun.

Today, though, corporate executives face a daunting array of threats beyond the ever-present danger of kidnap for ransom. In our gun-happy society, there is always the risk that yesterday's disgruntled employee may morph into today's deranged killer. Executives are sometimes viewed as symbols, and symbols can attract the attention of a variety of loonies. And, of course, there is the now-ever-present threat of terrorist attack, which can range from the mass horror of Sept. 11 to the individual tragedy of a victim grabbed, displayed in propaganda videotapes, and murdered while the camera rolls.

What's a concerned and responsible board of directors to do?

Levels of protection

Seven years ago, a Wall Street Journal article on executive protection reported that an estimated 25 CEOs were then getting round-the-clock protection, at a cost to their companies of up to half a million dollars a...