The life of an executive is fraught with risks of all kinds ; and these do not cease to increase.

Certain risks concern the individuals directly : executives and their families. Other risks put in danger their own property and resources : real estate or personal estate.

These risks are related to :

  • The hazards of personal life (health, accident, assistance, dependence, pension, death) ;
  • The professional life developments, at each career step (recruitment, change of perimeter, mobility, merger, acquisition, breach of contract, unemployment) ;
  • The exerted responsibilities (civil and criminal liability).

In order to feel stronger, it is necessary to identify these risks, to evaluate them and to anticipate them reasonably. The higher the threats, the higher the protection systems. The executive needs to protect himself and to protect his family, his team, and his company.

The executives legitimately give attention to the protection of their property and resources ; but the protection of individuals is an even more fundamental stake.

To improve the insurance coverage

The collective insurance systems are deteriorating. Therefore this coverage today concerns the company AND the individual liability.

The executive must take care of ensuring his family against the various risks related to hazards of life (medical, check up, assistance), while paying a special attention to major risks (disability, surgery, handicapped children, dependence, death).

The pension period is lengthening, and the replacement income fall.

If the standard of living is to be preserved, it is advisable to anticipate and carefully prepare the final stage of career within the framework of the company or on a purely individual basis : to make an individual pension assessment, to validate the entitlements, to analyze the output of possible repurchase of retirement entitlements, to optimize the retirement date, to identify other opportunities to improve the pension, to know the amount of the survivor's pension, and to be guided in the tiresome formalities when retiring.

To guide a professional development

Each career step (change of company, change of perimeter, mobility), each change of environment (reorganization, merger, acquisition, takeover) present a risk.

Each step, and in particular change of company and international mobility, should be the opportunity of paying a particular attention to the protection of executives, and not exclusively to the remuneration issues. It can (should) be managed in a win-win process.

To insure oneself against civil risks

Executives, especially Board members and corporate officers, are exposed to risks.

Some preventive measures are essential :

  • Knowledge of internal control procedures and risk management in France and internationally ;
  • Traceability of decisions, in particular for Board members : when a Board member doesn’t share a Board decision, he must demand that his opposition be expressly stated in the minutes ;
  • Verification of the liability insurance, knowing that, due to the regulation, there are a number of exclusions of guarantees, which are significant :
    • Any claim based on personal benefit or compensation to which an insured person was not legally entitled ;
    • Any willful misconduct committed by an executive.
    • In addition, actions in North America are generally excluded because of the frequency of litigation and premium supplements required. Some exposed sectors, such as financial institutions, are sometimes excluded from guarantees.

  • Set up an indemnity letter, which :
    • Makes the company a « self-insurer », to supplement the protection provided by the insurance ;
    • Guarantees protection for the executive, even after having left the company, for acts incurred when he was in charge.

To move away the penal risk

The penal risk is hardly insurable (depending on countries). But it is generally possible and suitable to organize a company to delegate to line managers the responsibilities which concern their perimeters.

These delegations must respect strict conditions of application.

To make a successful breach of contract

In Europe and North America, companies entered the era of the « ephemeral » executive. Since, the executives find themselves on ejectable seats.

Therefore, it is preferable to anticipate and carefully prepare the breach of contract, in order to optimize the golden parachute, and transform this stage into a new opportunity.

Multiple devices can be considered, while respecting the financial and management constraints of the company : parachute, adapted notice period, non competition clause, tailor made outplacement, preservation of pension rights, unemployment insurance for company officers...