Private Company Risks Not Well Understood

Multibillion-dollar settlements of class actions by public companies may grab the biggest headlines, but directors and officers of private companies are exposed to the same sources of risk that threaten their publicly traded counterparts.

Directors and officers of private companies have the same duties of loyalty, care and obedience. Additionally, these directors and officers and their companies face exposures emanating from employment practices liability, fiduciary liability and commercial crime–all exposures that both private and public companies share.