Director and Officer Liability

On November 16, 2023, a jury convicted two executives of an appliance sales and distribution company for conspiracy and for failing to report a consumer product defect under the Consumer Product Safety Act (CPSA). According to the U.S. Department of Justice, the case represents the first-ever prosecution of corporate executives under the act. The DOJ’s November 17, 2023, press release about the prosecution can be found here. The Hyman, Phelps, & McNamara law firm’s November 28, 2023 memo about the prosecution can be found here.Continue Reading Execs Convicted in First-Ever Consumer Product Safety Reporting Prosecution

Here at The D&O Diary, we cover the liabilities of corporate directors and officers. Geopolitical concerns are not typically part of our beat. But as we all finish up the year and get ready to start 2024, geopolitical concerns are necessarily part of what we are worried about in the current climate. That is true as a general matter and within the specific context of this blog; as the evidence has shown this year, geopolitical concerns have translated into corporate and securities lawsuits, and there is plenty to worry about for next year as well.Continue Reading Geopolitical Issues and D&O Risk Exposure

By now, readers are well aware that ESG has become a politically divisive issue. In a series of variations on this theme, two conservative legal commentators, writing in a Wall Street Journal op-ed column, argue that ESG is a trojan horse for progressive political objectives that, if Delaware’s courts continue their current course, could cost the state its privileged position as the preferred jurisdiction for corporate organization. The November 25, 2023 Journal op-ed, which was written by former U.S. Attorney General William Barr and Washington Attorney and former Department of Labor official Jonathan Berry, and is entitled “Delaware is Trying Hard to Drive Away Corporations,” can be found here.Continue Reading Will Delaware’s Embrace of an “ESG Agenda” Cause Corporations to Flee?

Francis Kean

In the following guest post, Francis Kean, Partner in Financial Lines Team at McGill and Partners, reviews the developments surrounding the proceedings brought against the non-executive directors of Carillion plc and considers their implications. This article was first published online on 16th October 2023 by The Chartered Governance Institute for UK and Ireland.

Arlene Levitin
Bonnie Hoffman

In the current challenging economic circumstances, corporate directors and officers face a daunting array of potential liability exposures. In the following guest post, Arlene Levitin, Esq., Claims Officer, Complex Management Liability, NAS Financial Lines Claims, Liberty Mutual Insurance;, and  Bonnie Hoffman, Esq., Hangley Aronchick Segal Pudlin & Shiller, propose three ways that through careful planning directors and officers can reduce their potential liability risks. I would like to thank Arlene and Bonnie for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Arlene and Bonnie’s article.Continue Reading Guest Post: Planning for D&O Lawsuits: 3 Tips for Reducing Risks for Directors and Officers

There have recently been a number of Delaware court decisions relating to the Duty of Oversight. In the following guest post, Frederick M Zauderer, Esq., Senior Vice President, Head of Complex Claims – North American Liability at AXIS Capital Holdings, Ltd., Joseph P. Monteleone, Esq., Partner at Weber Gallagher, and Alvin H. Fenichel, CPA, Senior Advisor at H.S. Grace & Company, Inc., take a look at the recent Delaware Duty of Oversight decisions and consider their implications. A version of this article previously was published on the Association of Corporate Counsel (ACC) Docket site (here).   I would like to thank the authors for allowing me to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.Continue Reading Guest Post: Board Oversight Duties: Recent Adventures in the Delaware Chancery

As I have noted in prior posts, conflicting political views about ESG-related issues have put corporate executives in the crosshairs, a dilemma that has caused some companies to try to avoid ESG issues altogether – a phenomenon that has been described as “greenhushing.” Among other concerns troubling corporate officials about the entire ESG debate is that some politicians have publicly raised the possibility that the act of taking ESG considerations into account in decision-making could itself constitute a breach of fiduciary duty.Continue Reading Disney, Fiduciary Duties, Business Judgment, and Corporate ESG-Related Actions

Corporate directors and managers have broad responsibilities to oversee their company’s operations. Among the most important items for these executives to monitor are the company’s operational and capital cash flows. In following guest post, H. Stephen Grace, Jr., Suzanne H. Gilbert, S. Lawrence Prendergast, and Joseph P. Montelone, the importance of corporate executives’ oversight of cash flows cannot be overstated – it is, the authors suggest, “the most critical indicator of a company’s ability to survive.” Steve Grace is President and Founder of H.S. Grace & Company, Inc.,; Suzanne Gilbert is a veteran corporate executive with over 30 years of experience with the Interpublic Group of Companies (IPG); Larry Prendergast is Chairman of the Turrell Fund and serves on the advisory boards of several investment funds, including JPMorgan; and Joe Monteleone is a Partner at the Weber Gallagher Simpson Stapleton Fires & Newby LLP law firm. A version of this article previously was published on ABA’s Business Law Today site (here). I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article. Continue Reading Guest Post: Monitoring Cash Flows: The Board, the CLO, and the CFO