D&O Duty of Oversight Amid the Economic Crisis

Avoiding and Defending Breach of Fiduciary Duty Lawsuits

Recording of a 90-minute CLE webinar with Q&A

Conducted on Thursday, June 11, 2009

Program Materials

This seminar will review the impact of the economic crisis on board governance practices and offer strategies for corporate counsel to avoid legal liability and survive shareholder scrutiny.

Description

As the federal government and corporate shareholders actively seek to determine the driving force behind the economic crisis, the oversight role of corporate boards of directors is frequently called into question.

A February 2009 decision of the Delaware Court of Chancery, In re Citigroup Inc. Shareholder Derivative Litigation, is an important decision on oversight liability and the doctrine of corporate waste that is expected to significantly impact derivative suits arising from the economic crisis.

In the current environment, directors and officers must evaluate and adjust their governance practices to minimize vulnerabilities and anticipate future risks. Failure to exercise adequate oversight may result in shareholder litigation, government enforcement and negative publicity.

Listen as our panel of corporate attorneys reviews the impact of the economic crisis on board governance practices and offers strategies to avoid legal liability and survive shareholder scrutiny.

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Outline

  1. D&O duties in the current environment
    1. Duty of oversight
    2. Duty of disclosure
    3. Doctrine of corporate waste
    4. Recent case law
    5. Issues for troubled companies
  2. Impact of SEC 2009 agenda on board practices
  3. Best practices to avoid lawsuits or minimize liability
    1. Establish procedures to discourage fraud and misbehavior (whistleblower procedures, ethical guidelines)
    2. Review and modify risk management policies, including liquidity risk management
    3. Review and modify executive compensation
    4. Address risk assessment during board meetings
    5. Adequately budget for internal controls and compliance monitoring
    6. Comply with disclosure obligations under federal securities laws
    7. Prepare for high priority corporate governance issues
    8. Review D&O insurance and indemnification arrangements

Benefits

The panel will review these and other key questions:

  • What fiduciary duties of directors and officers are most significant during the economic meltdown?
  • How will the In re Citigroup Inc. Shareholder Derivative Litigation decision impact cases arising out of the economic crisis?
  • What best practices should counsel recommend when advising corporate boards on minimizing risk vulnerabilities?
  • What protection does the business judgment rule presumption provide to directors and officers?

Faculty

Lisa A. Fontenot
Lisa A. Fontenot
Partner
Gibson Dunn & Crutcher

She is a member of the firm's Corporate Transactions, Mergers and Acquisitions and Securities Regulation Groups. She...  |  Read More

Susan Webster
Susan Webster
Partner
Cravath Swaine & Moore

She leads the firm’s General Corporate Practice, which includes its Corporate Governance and Board Advisory...  |  Read More

Michael E. Foreman
Michael E. Foreman
Partner
Dorsey & Whitney

He represents secured and unsecured lenders and creditors, acquirers of and investors in distressed assets, and...  |  Read More

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CLE On-Demand Audio

$297