Free Booklet Explains Sarbanes-Oxley To Directors

Chubb said its publication, "Loss Prevention Guidelines for Independent Directors," addresses corporate governance best practices, which the insurer noted "have become increasingly important following recent corporate scandals" and passage of the Public Company Accounting and Investor Protection Act of 2002 [Sarbanes-Oxley].

The firm said the legislation has redefined corporate conduct and the relationship between directors, officers, accountants, attorneys and analysts.

Chubb noted that while Sarbanes-Oxley was intended for publicly traded companies, many of the standards the act sets are now being applied to private and nonprofit companies.

"After Sarbanes-Oxley, independent directors want to know what is expected of them," said Andrew Pritchard, assistant vice president of Chubb & Son and worldwide manager for Personal Directors Liability insurance at Chubb Specialty Insurance. "This guide can help them understand their responsibilities and navigate the evolving role of independent directors."

Chubb noted that Sarbanes-Oxley mandates that audit committees be made up entirely of independent directors.

The insurer said its guide could also serve as a tool for corporate managers who seek a better understanding of issues related to corporate governance and independent directors.

Included in the booklet is a section on selecting, recruiting and retaining independent directors.

Other material includes a discussion of the various board committees on which independent directors may serve, such as audit, nominating, compensation and corporate governance;

Chubb said there is also a section on providing financial protection for independent directors, such as corporate indemnification and directors' and officers' liability insurance. There are recommendations for corporate governance best practices, including requiring that boards be composed of a majority of independents and that independent directors meet regularly without management present to assess company operations and management's performance.

Chubb noted that besides directors' and officers' liability insurance, the company offers a Personal Director's Liability Insurance policy, to help independent directors protect their personal assets when they are sued by shareholders and others.

The insurer said the directors' policy, with its personally dedicated policy limit, provides coverage to independent directors when certain losses are not indemnified by their companies or paid by other directors' and officers' liability insurance.

Copies of "Loss Prevention Guidelines for Independent Directors" are available through independent insurance agents or by calling (866) 282-9001 and requesting form number 14-01-0679.