Articles & Updates
Boardroom Briefings - D&O and Foreign Subsidiaries
By Priya Cherian Huskins, Esq.
Tue Dec 23 14:30:00 -0800 2008
Given the increasingly global nature of business, many US public and private companies find it advantageous to incorporate subsidiaries in jurisdictions outside of the United States. It has long been accepted as conventional wisdom that the officers and directors of these foreign subsidiaries face little risk of personal liability and that, if a problem were to arise, the parent company’s director and officer liability insurance policy would respond. Conventional wisdom is, in this case, unreliable.
For Your More Robust Personal Protection
By Priya Cherian Huskins, Esq.
Tue Nov 11 17:13:00 -0800 2008
Directors and officers of corporations face the risk of personal liability for actions performed and decisions made on behalf of the corporation. Perhaps unknowingly, many directors and officers unnecessarily accept an enhanced risk of personal liability by failing to insist on a personal indemnification agreement – a relatively common agreement that obligates the corporation to indemnify a director or officer for his or her actions
The Initial Public Offering: A Guidebook for Executives and Boards of Directors
By Priya Cherian Huskins, Esq.
Fri Oct 24 15:47:00 -0700 2008
"The Initial Public Offering" is an annual guide for Executives and Boards of Directors, published by Wilson Sonsini Goodrich & Rosati. Woodruff-Sawyer's Priya Cherian Huskins is featured in the chapter on D&O Liability Insurance.
D&O Checklist
By Priya Cherian Huskins, Esq.
Thu Jul 31 13:40:00 -0700 2008
The Entrepreneurs Report - Private Company D&O Insurance
By Priya Cherian Huskins, Esq.
Fri Jun 27 15:02:00 -0700 2008
Directors and Officers of private companies potentially face unlimited personal liability if they are sued. As a result, when it is time for a start-up company to recruit serious talent to take the company to the next level, the purchase of director and officer liability insurance becomes a priority. This article was first published in the Spring 2008 issue of The Entrepreneurs Report, by Wilson, Sonsini, Goodrich & Rosati.
Stanford Law Review: FCPA Prosecutions: Liability Trend to Watch
By Priya Cherian Huskins, Esq.
Wed May 28 19:03:00 -0700 2008
When it comes to compliance with the Foreign Corrupt Practices Act (FCPA), multinational companies that adopt a "don't ask, don't tell" policy may come to regret their hands-off approach. Compliance with the FCPA's laws against bribing foreign officials has recently come under increased scrutiny by the Securities and Exchange Commission (SEC), the United States Department of Justice (DOJ), and the plaintiffs' bar. At the same time, jurisdictions outside of the United States have also exhibited a renewed interest in enforcing their own FCPA-like laws.
For individual officers and directors, the environment is equally challenging. Of particular concern may be an emerging focus by the SEC to hold individual officers personally liable for failing to implement proper internal controls designed to prevent FCPA violations.
Sale of a Company: Director Duties and Personal Protection
By Priya Cherian Huskins, Esq.
Fri May 02 14:11:00 -0700 2008
Consider this scenario: a company’s CEO tells his board that he has received a compelling offer for the sale of the company. Upon reviewing the offer, the directors agree that the offer is attractive, and think that the shareholders would be well-served to accept the offer. However, as experienced board members, they know that the potential sale of a company is an inflection point for litigation. The board’s next steps are critical, both to maximize shareholder value and to avoid litigation that may result from failing to do so. This article outlines the fundamental duties of a board considering the sale of a company. The article also details what a board can do—beyond diligently fulfilling its duties—to protect itself from liability and thereby focus entirely on promoting the interest of shareholders.
Urgent D&O Risk Management Initiative: Protecting Directors and Officers of Foreign Subsidiaries
By Priya Cherian Huskins, Esq.
Fri May 02 14:09:00 -0700 2008
Given the increasingly global nature of business, many US public and private companies find it advantageous to incorporate subsidiaries in jurisdictions outside of the United States. It has long been accepted as conventional wisdom that the officers and directors of these foreign subsidiaries face little risk of personal liability and that, if a problem were to arise, the parent company’s director and officer liability insurance policy would respond. Conventional wisdom is, in this case, unreliable.
Avoiding the Next D&O Liability Disaster: FCPA Prosecutions
By Priya Cherian Huskins, Esq.
Fri Feb 15 13:29:00 -0800 2008
"Don't ask, don't tell" is not a winning strategy when it comes to compliance with the Foreign Corrupt Practices Act (FCPA). Both public and private companies need a more hands-on approach, and urgently so.
Questions to Ask When Joining a Board
By Priya Cherian Huskins, Esq.
Wed Jan 09 12:17:00 -0800 2008
When you join the board of a company, you are making a long-term commitment that carries with it the risk of unlimited personal liability if things go terribly wrong. A systematic approach to conducting your diligence on the company is therefore in order.
What to Expect in D&O Pricing Trends
By Priya Cherian Huskins, Esq.
Fri Dec 14 19:15:00 -0800 2007
So far the credit debacle and backdating cases haven't had an immediate impact on the price of Directors & Officers (D&O) liability insurance. The market has remained soft despite some high profile settlements. While companies, and indirectly their boards are reaping the benefit of the soft market, it won't last. History is instructive of this point. This article details how using empirical data can be developed to stabilize costs over time.
May In-House Counsel Enter Into An Indemnification Agreement?
By Priya Cherian Huskins, Esq.
Thu Jun 28 15:14:00 -0700 2007
When it comes to indemnification agreements for in-house counsel, an interesting question arises given the ethical duties of attorneys. In particular, is it proper for a California in-house attorney to enter into an indemnification agreement with his or her employer?
10b5-1 Trading Plans: The Next Stock Option Backdating Scandal?
By Priya Cherian Huskins, Esq.
Wed May 30 15:13:00 -0700 2007
Could abuses of 10b5-1 trading plans become the next corporate governance scandal? This article discusses new research calling into question the legality of certain trades being made under 10b5-1 trading plans.
Six Ways to Protect Independent Directors
By Priya Cherian Huskins, Esq.
Thu Mar 01 15:12:00 -0800 2007
The second anniversary of the historic out-of-pocket payments by the independent directors of WorldCom and Enron is a good time to re-examine conventional wisdom. There are alternatives to buying ever-larger D&O insurance policies. Priya Cherian Huskins discusses six of those options in this article.
The Options Scandal and the D&O Insurance Response
By Priya Cherian Huskins, Esq.
Mon Jan 01 15:11:00 -0800 2007
The director and officer liability insurance industry was as surprised as everyone else by the recent options backdating scandal. D&O carriers had never previously considered improper option accounting, and therefore few, if any, D&O policies contained explicit provisions addressing options backdating. Since the scandal first hit, however, D&O insurance carriers have had a chance to assess their exposure, consider their coverage position under the language of existing policies, and determine how they will treat improper option accounting issues going forward. In general, most D&O insurance carriers have been reasonable and evenhanded in their response. This article discusses those the backdating issue and the D&O insurance response.
Option Granting Best Practices: Avoiding the Sins of the Past
By Priya Cherian Huskins, Esq.
Mon Jan 01 15:06:00 -0800 2007
The recent options backdating scandal has been instructive on a number of fronts. This article summarizes a listing of "best practices" for administering options plans that will help prevent future problems.
Indemnification - Are You Protected?
By Priya Cherian Huskins, Esq.
Sun Jan 01 15:04:00 -0800 2006
For a long time, many directors and officers of companies have been happy to accept whatever indemnification provisions a company may happen to have in its charter documents and sign whatever form of indemnification agreement that their companies handed to them. An indemnification agreement obligates a company to defend directors and officers against certain kinds of lawsuits related to the duties performed by directors or officers. However, directors and officers became a lot more motivated to review these documents in October 2003. Read this article to learn why.