Serving On Boards “Not For The Faint Of Heart”

Jones Day attorneys David Woodcock and John T. Sullivan look at the current director liability landscape, including DOJ’s “Yates memo” and the agency’s renewed interest in individual prosecutions, and what directors can do to minimize their risk. (It was the SEC director herself, the writers point out, who noted recently that serving on corporate boards “is not for the faint of heart.”) This post looks at what charges have been brought against directors recently, and for what specific actions or failures to act. From this inventory it derives three takeaway principles for an understanding of what the SEC is doing in this area, concluding with specific suggestions for how board members can keep themselves, and their companies, out of trouble.