Directors under fire; corporate board members should approach their tasks with caution

Article Abstract:

Business litigation is more frequent and corporate directors are growing more apprehensive about their liability. Directors should be aware that the business judgment rule still provides them appreciable protection. They must, however, be sure they are apprised of all the facts when taking part in board decisions. They should steer clear of situations where they or close relatives have conflicts of interest with corporate activities. They should not accept directorships unless they have investigated the companies whose boards they may join and can take an active part in the board's work.

Business judgment rule, Indemnity against liability, Liability indemnity

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A watchdog for the guardians

Article Abstract:

The American Law Institute's Corporate Governance Project has proposed a change in the rules on shareholder litigation requiring corporate boards to show evidence in court that the dismissal of a shareholder claim charging self-dealing was in the company's best interest. The rule mandating a formal 'demand' on the board by stockholders would apply across the board rather than being subject to excuse. Demand on the board is inexpensive and easy and requiring it across the board will increase the chances of a dispute resolution before involvement by the courts.

Stockholders' derivative actions, Shareholder lawsuits

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No: the SEC is our best line of defense against crooks

Article Abstract:

The Securities and Exchange Commission (SEC) is necessary to regulate the securities industry and markets, to investigate fraud, and to prevent the problems that recently beset the savings and loan industry. State regulators, the exchanges, private litigants, and market forces are all inadequate to replace the SEC functions. Its most vital purpose is the disclosure system, which makes the US markets and methods the model for every other exchange in the world.

United States, Management, Financial services industry, Financial services, United States. Securities and Exchange Commission

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