What sources of law do you navigate in order to address questions of director and officer liability, and what trends do you see among the regulatory agencies and courts that supervise these issues?

We would advise the General Counsel to first review the terms of appointment and any executive services agreement entered into with the C-level executives. It is recommended that these documents contain terms which clearly set out their duties and responsibilities to the board.

They should also include special precautionary requirements, such as prohibition from having interests in competing companies and clarifying matters of the company which must be referred to the board for decision or approval.

Commitment to always promote the interests of the organisation and not to engage in any conflicting interests should be stipulated, as should the obligation to return and delete all organisational information, including any access to the company’s email or database server when leaving the company.

The General Counsel should be aware of each C-level executives’ reporting responsibilities. It is recommended that their reports be provided in writing, and if the report is presented during a meeting to the board, then minutes of such meeting should be recorded in writing.

The General Counsel should remind C-level executives that they should only report to the board at a time arranged and where proper records can be kept. They should avoid speaking to the board or board members at a place outside the work environment, or by personal telephone and/or email.

There are occasions where C-level executives would also sit on the board. In such cases, we would recommend the General Counsel take precautions to make sure these executives still carry out their reporting requirements to the rest of the board members. Also the General Counsel should be ready to advise the board as to the possible conflict of interest that such executives may have in certain board proceedings.