In recent months, commentators from across the political spectrum, largely in response to perceived excesses of activist investors, have called for changes to discourage “short-termism” – that is, the perceived excessive focus of businesses on short-term results rather long-term value creation. Voices ranging all the way from Democratic Presidential candidate Hillary Clinton (about which refer here) to Republican SEC Commissioner Daniel Gallagher (refer here) have voiced their concerns about what they characterize as the inappropriately short term focus that they suggest is driving American business decision-making. This topic raises a number of issues of importance for a variety of different constituencies, including, as discussed below, those of us in the D&O insurance industry.
Continue Reading The Short-Termism Debate: Are There D&O Liability Issues Involved, Too?
SEC Commissioner Gallagher at the Stanford Law School Directors’ College
The D&O Diary was in Palo Alto, California this week for the annual Directors’ College at the Stanford Law School (depicted to the left). The keynote speaker on Tuesday morning was SEC Commissioner Daniel M. Gallagher, who recently announced that he will be stepping down from the Commission when his successor has been confirmed.
Corporate Loan Provisions Aimed at Proxy Campaigns Trigger D&O Litigation
In the face of increasing investor activism, companies have adopted a number of defensive measures. Among these measures are a particular type of provision found in many corporate borrowers loan agreements – requiring the company to repay loans before they are due if a majority of the board is ousted – that are drawing increasing
Bank Directors Facing Increased Regulatory Scrutiny, Raising Fears of Potential New Liability Exposures
Federal banking regulators have stepped up their interactions with and scrutiny of bank directors, according a recent Wall Street Journal article. The March 31, 2015 article, entitled “Regulators Intensify Scrutiny of Bank Boards” (here) details the ways in which regulators are “zeroing in on Wall Street boardrooms as part of the government’s intensified