The bar for proving director liability has historically been pretty high. Yet, it’s foolish for board members to simply disregard the dangers—especially in today’s business environment, which is laden with new risks.
In this episode, our legal expert William Chandler (Former Chancellor, Delaware Court of Chancery and Partner, Wilson Sonsini Goodrich & Rosati) returns to discuss various aspects of board and director liability. What liabilities exist in today’s boardrooms? How can they be mitigated?
I use this old metaphysical story: If a tree falls in the forest, and there’s no one there to hear it, does it make a noise? The corporate law analog to that is: if a board follows an exemplary process but has no record of it, will the judge still respect what the directors did? You don’t want to find out the answer to that.
Specifically, Chandler discusses three risk areas and how they relate to director liability:
- Taking notes in board meetings
- Possessing specialized skills or expertise (e.g., cybersecurity, M&A)
- Preparing for a company data breach