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In a post last week, I wrote about the recurring question of who is an “officer” for purposes of determining qualification for advancement, indemnification, and insurance benefits. I received several comments about the post, including a note from Keith Paul Bishop of the Allen Matkins law firm, who writes the California Corporate & Securities Law blog. Bishop wrote to send me links to two of his blog posts, in which he explored the California and Delaware statutory provisions relevant to the question of, as he put it, “what makes an officer an officer?” His blog posts provide interesting additional perspective on this question.Continue Reading More About Who is an “Officer”

Francis Kean

On October 26, 2023, the Economic Crime and Corporate Transparency Act 2023 (the Act) became law in the UK. The Act is part of the UK government’s effort to tackle economic crime. In the following guest post, Francis Kean, Partner in the Financial Lines Team at McGill and Partners, takes a look at the SFO’s new investigative powers under the Act and considers their implications for corporate executives. A version of this article previously was published in the Governance and Compliance Magazine. I would like to thank Francis for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Francis’s article.Continue Reading Guest Post: The Personal Liability Implications for Directors of the SFO’s New Investigatory Powers

There is no doubt that ESG both as a concept and as a social, political, and litigation phenomenon has changed over time. Due to political backlash and changing investor priorities, ESG and ESG-related issues recently have featured less prominently in general economic and business dialog than even just a short time ago. An interesting and thought-provoking May 2, 2024, article (here) from the Rock Center for Corporate Governance asks the question whether the circumstances surrounding ESG are changing because ESG “is a luxury good”? (Hat Tip to Cydney Posner’s May 13, 2024, post on the Cooley law firm PubCo blog, here). The article raises some interesting questions and reflects interesting data and observations.Continue Reading Is ESG a “Luxury Good”?

As readers undoubtedly have noted, one of the hot topics these days is the question whether corporations should change their state of incorporation from Delaware to that of another state, usually either Nevada or Texas. The dialog on this topic was already underway when Elon Musk supercharged the conversation by vowing, in reaction to the Delaware court’s disallowance of his $56 billion pay package, to have Tesla change its state of incorporation from Delaware to Texas. I suspect that the state of incorporation debate is going to be with us for some time to come, making it important for those of us who might have to participate in (or at least listen to) the conversation to get a handle on the key differences between the states.Continue Reading Delaware or Another State: What’s the Difference?

From time to time, I am asked to speak directly to corporate boards of directors. I find these opportunities endlessly fascinating. Among other things, I learn so much from the directors’ questions. One frequently recurring question I get is:  what can directors do to avoid litigation or to be in a position better defend themselves if they are sued. The first thing I always talk about when asked these kinds of question is the importance of board minutes. Because this is one of my go-to talking points when I meet with boards, I was particularly pleased to see the recent post on the Harvard Law School Forum on Corporate Governance blog written by Leo E. Strine, Jr., the former Delaware Supreme Court Chief Justice and Chancellor, in which Strine highlights the importance of board minutes in corporate litigation. Strine’s comments are essential reading for anyone concerned with the liabilities of corporate directors. Strine’s April 4, 2024 article can be found here.Continue Reading The Importance of Board Minutes

Priya Cherian Huskins

In a recent post in which I discussed the cyber incident-related enforcement action the SEC brought against the software company SolarWinds, I noted that the defendants named in the action included the company’s Chief Information Security Officer(CISO), adding that the SEC’s naming of the CISO as an enforcement action defendants “is sure to send a shiver down the collective spines of the CISO community.” In the following guest post, Priya Cherian Huskins, Senior Vice President and Partner, Woodruff Sawyer, takes a detailed look at the agency’s action against the SolarWinds CISO, and considers the key liability and insurance implications. A version of this article previously published on Woodruff Sawyer’s D&O Notebook here. I would like to thank Priya for allowing me to publish her 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 Priya’s article.Continue Reading Guest Post: CISO Liability in Focus: SEC Enforcement, Insurance, and [Personal] Risk Mitigation

As the phenomenon of ESG-related litigation has developed and evolved in recent months, it has unfolded that the lawsuits are not, as was expected, being filed against ESG laggards, but instead are being filed against companies that were proactive on ESG-related issues. One of the cases illustrating this development is the securities lawsuit filed against the consumer products company Unilever, based on allegations that the company had failed to disclose a resolution passed by the independent board of its Ben and Jerry’s subsidiary to end ice cream sales in occupied Israeli territories. On August 29, 2023, In a ruling that suggests that these kinds of ESG-related cases could face challenges, Southern District of New York Judge Lorna Schofield granted the defendants’ motion to dismiss the lawsuit, on the grounds that the plaintiff had failed to sufficiently plead scienter. A copy of the August 29 opinion and order can be found here.Continue Reading ESG-Related Suit Against Unilever Based on Ben & Jerry’s Board’s Resolution Dismissed

ESG has for some time now been a hot button issue for companies. More recently, an anti-ESG backlash has emerged, further complicating the ESG environment for companies and sometimes putting them in a “damned-if-you-do-and damned-if-you-don’t” dilemma. How are companies to navigate these complicated conditions? In a May 23, 2023 post on the Harvard Law School Forum on Corporate Governance entitled “Navigating the Current ESG Landscape: Recommendations for the Board and Management” (here), veteran and respected corporate attorney Martin Lipton of the Wachtell, Lipton law firm provides guidance for companies as they navigate these difficult circumstances and describes the principles companies should follow in trying to make their way on these issues.Continue Reading Navigating the Challenging ESG Landscape

ESG is of course one of the current hot button topics, in the corporate, legal, and financial world. One of the many issues surrounding ESG is the question of how ESG initiatives fit with traditional notions surrounding corporate purposes. In the following guest post, Greg Markel, Giovanna Ferrari, and Sarah Fedner of the Seyfarth Shaw law firm take a comprehensive look at the ways in which ESG fits within the basic principles of corporate governance and corporate purpose . 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 on topics to the readers of this blog. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.Continue Reading Guest Post: ESG and Corporate Purpose:  Their Current Status and How They Relate

In prior posts on this site (for example here), I have expressed my concern that the current hot topic of ESG has a fundamental underlying flaw in that the term lacks definition and that this lack of precision has led to a great deal of sloppy thinking. A recent post on the Harvard Law School Forum on Corporate Governance provides a good examination of these ESG-related concerns. In an October 14, 2022 post (here), Douglas Chia of Soundboard Governance LLC, shows, using cybersecurity as an example, that one of the “biggest flaws” of ESG is “the subjective open-endedness of what counts as E, S, or G.”
Continue Reading ESG’s “Biggest Risk”?