Investors are accustomed to seeing natural disasters or even terrorist attacks listed as risk factors in publicly-traded companies’ corporate disclosures. But with active shooter incidents on the rise, companies are coming to the unfortunate realization that disclosing the potential impact of an act of targeted violence is their new reality.

Disclosing the Active Shooter Risk

Earlier this month, the Wall Street Journal detailed how public companies are disclosing to investors how gun violence could impact their financial performance. Disclosure of risk factors is required by law to ensure investors receive a holistic picture of a company’s financial potential – and gun violence is becoming a leading concern.

Adding a violent attack as a risk factor can assist these companies in decreasing their liability if an incident were to occur within their operations, offices or facilities. According to the article, “If a company experienced a shooting, causing its stock to drop, it could argue it previously warned investors of the possibility.”

Corporations that have incorporated this type of language in their disclosures include the Cheesecake Factory, Dave & Buster’s and Del Taco. For example, Dave & Buster’s Securities and Exchange Commission filing reads:

“Any act of violence at or threatened against our stores or the centers in which they are located, including active shooter situations and terrorist activities, may result in restricted access to our stores and/or store closures in the short-term and, in the long term, may cause our customers and employees to avoid visiting our stores. Any such situation could adversely impact cash flows and make it more difficult to fully staff our stores, which could materially adversely affect our business.”

Protecting People and Assets with a Workplace Violence Prevention Program

When we approach a client about developing a workplace violence prevention program, we emphasize how it will protect, first and foremost, its people. But as the Wall Street Journal’s findings suggest, gun violence poses a significant risk to financial performance as well, and some companies are increasingly concerned about their exposure and vulnerability to the issue.

This development highlights the increasing importance of establishing a workplace violence prevention program to not only protect employees and customers, but also to protect business performance. An effective program includes clear, actionable guidance on areas ranging from core operational policies, practices, compliance, privacy, reporting and incident tracking to the formation of a cross functional, multidisciplinary threat assessment team. While a public disclosure may satiate investors concerned about violence and cushion a company against future litigation, an actual program works to prevent an incident – with both personal and financial consequences – from happening in the first place.