You are here: Fairness.com > Resources > "Directors Run Risk of Paying ...

"Directors Run Risk of Paying Penalties Out of Their Pockets"

Date: January 20, 2005
Author: Ben White
QUOTE: Although there have been isolated incidents in the past of directors and executives being held personally responsible financially or volunteering to forgo payments, in recent weeks the emphasis on paybacks has picked up momentum.

ABSTRACT: Shareholders, legislators, regulators, and companies reintroduced demands about making corporate executives and directors pay financial penalties from their personal assets for participating in business fraud or failing to prevent it. One challenge is to balance corporate directors' liability for fraud or negligence against the need to protect them from personal liability in general (the author cited a 1980s Delaware approach in a similar situation). The liability of insurance companies to pay out claims if their grant of coverage was based on fraudulent information is another controversial issue.

--- Misty Pegue

Article MetaInformation:

Key People:
Key Organizations:
Subject & Geographic Categories:

Comments:

none
*User comments are posted without Fairness.com LLC's prior review or approval, and Fairness.com LLC takes no responsibility for them; please see our Conditions of Service Agreement.