Fear Of Liability Haunts Corporate Boards, Hinders Recruiting

It was already getting more difficult for companies to recruit board members, but following the Yates Memo of September last year “the specter of catastrophic personal liability has reached unprecedented levels,” write Fox Rothschild attorneys Stephanie Resnick and John C. Fuller. Named for DOJ Deputy Attorney General Sally Quillian Yates, the Yates Memo was an explicit statement of DOJ’s resolve to go after culpable individuals in cases of corporate malfeasance, and it will have significant and not necessarily obvious implications. One example: When individuals as well as a company become a target, it often will mean a bifurcated defense is required, with not only separate counsel but possibly separate e-discovery efforts. When it comes to board recruitment, the authors write, companies “will need to address difficult subjects such as liability policy limits.”