The Independent Director's Toolkit
Corporate Board Member
In this article, Litigation Member William Barry and Summer Associate Jae Sung Kim discuss five proactive steps that independent directors can take to be prepared to respond when crises arise, and do so in a manner consistent with established principles of corporate governance and regulators’ expectations. "U.S. regulators have been vocal in commenting on the roles and responsibilities of independent directors," the authors wrote, citing Caremark, the Sarbanes-Oxley Act, and recent statements and activity from the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) with respect to the Foreign Corrupt Practices Act. "There is no effective one-size-fits-all approach to optimal corporate governance or neat checklist for directors. That said, there are concrete steps the conscientious director can take to meet the recurring challenges and expectations of regulators and stakeholders," they wrote. "Implementation of these strategies may not guarantee a worry-free tenure for independent directors, but it will improve the awareness and discussion regarding corporate governance. It will demonstrate the conscientious independent director’s adherence to the bedrock principles of fiduciary duty articulated in Caremark and espoused by regulators."