Baker Hostetler New York attorneys John J. Carney and Francesca M. Harker co-authored the article, “Walking the Tightrope—Not the Plank: The Increased Challenge for Senior Management and Directors,” which appeared in Corporate Counsel and law.com on February 18, 2011.
Less than 40 years ago, the goals for a company’s senior management and its board of directors were relatively simple. Decisions were evaluated under the basic premises of doing what is best for the company's profitability and maximizing shareholder value.
Today, a company’s senior management and its directors face an enforcement environment that continues to heat up with no end in sight to increased enforcement and shareholder suits. Worse yet is the tightrope they are forced to walk when the expectations of regulators and shareholders are not in line—especially when alleged corporate misconduct is unclear or less than material to the financial results of the company.
For in-house counsel, having a solid understanding of the obligations owed to each constituency as well as the tools necessary to try and prevent or lessen the impact of a crisis is the first step in creating a much-needed safety net. The authors provide a detailed list of guidelines and recommendations to assist boards, senior management and in-house counsel in implementing a plan to mitigate risk and allow company officials to focus more on their business. A summary of their recommendations is below.
Tightrope walking may be unavoidable in modern corporate America, but you need hardly walk the plank.