SEC Faculty Advisor

Business Continuity Plan Certification

Q. We are a medium sized business and as such my team is having a hard time showing a cost-benefit to have our business continuity plan certified to a standard as recommended by Public Law 110-53. We are not a heavily regulated industry and to follow one of the recommended standards and go through the certification process seems like overkill. Can you give some examples of benefits to becoming certified?

A. The United States Congress made it quite clear that the program is to be voluntary and what it refers to as "market based."  Simply put, there are no clear cut financial incentives on the front end to have a company's plans certified.  However, as the concept of Enterprise Risk Management takes hold in the private sector, many believe market forces will virtually mandate certification due to pressures from Boards of Directors, the financial rating agencies, the plaintiff's bar and individual investors.  Furthermore, simply going through the certification process will enhance overall business resiliency, thereby allowing an organization to recover more quickly after the inevitable crisis is past. 

Answer provided by Don L. Hubbard, Security Executive Council Emeritus Faculty.

Executive Protection: IRS Code

Q.  Are the IRS code requirements for executive protection specific to personal use of the company planes and is the Code a benefit only to the executive (not the company)?

A. The IRS Code requires a bona fide security threat or concern be verified by an independent third party assessment.  The Code also requires the establishment of an overall security program for the executive(s) in question.  A critical component of the Code is consistent application of the protection provided in the following areas:
1. At the workplace
2. At the residence(s)
3. Traveling to and from the workplace
4. Traveling for business and/or personal reasons (including the use of corporate planes)
It is not one or the other; all conditions must be met.

The IRS Code Section 132 benefits both the executive and the company. For the executive it means an exclusion of a working condition fringe from gross income (this includes the costs of security protection e.g., a car and driver or alarms installed in the home). For the company is means significantly reducing tax liabilities.

The security professional that is aware of this compliance issue can assist both the executive and the business to become more secure and reduce operational costs.

Answer supplied by Randy Uzzell, Security Executive Council Emeritus Faculty