Independent directors serving on the boards of publicly owned, privately held and not-for-profit organizations all face numerous liability exposures, any of which can threaten their personal assets, said a D&O expert.
In the post-Enron era, independent directors are given a variety of responsibilities, including strategic planning, monitoring the actions of management to prevent abuses of power and providing a more balanced perspective on important issues.
Because of the Sarbanes-Oxley Act of 2002 and a stream of increasingly expensive shareholder claims against directors and officers, the financial and reputational risks to independent directors have never been greater. As a result, those considering service as independent directors are insisting on information concerning preventive measures, defensive tactics and financial protection.
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