Here’s a tip from the sixth edition of our popular publication The Public Company Handbook, which is an easy-to-read guide that provides practical insights regarding legal and other board management issues facing public—or soon-to-be-public—companies.

This tip involves the duty of care that a board of directors has. You may want to use this image to illustrate the duty of care for your Board:

  • “Directors get in trouble for speeding, not for running the car off the road!”

In other words, the Board should act in good faith to make its best thoughtful, considered and informed decisions. If no conflicts of interest exist and the Board follows an appropriate process, courts usually will not second-guess the directors even when, in hindsight, the Board makes a wrong choice, takes a wrong turn or causes the company to suffer a loss.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of John Thomas John Thomas

John Thomas, a partner in the firm’s Corporate practice, is a seasoned business transaction lawyer with more than 25 years of experience counseling and representing private and public companies in a variety of industries, including high technology, apparel, aviation, financial services, senior living…

John Thomas, a partner in the firm’s Corporate practice, is a seasoned business transaction lawyer with more than 25 years of experience counseling and representing private and public companies in a variety of industries, including high technology, apparel, aviation, financial services, senior living and clean technology. John focuses his practice on counseling and representing clients in mergers and acquisitions; corporate financings, including underwritten public securities offerings and private placements; joint ventures and strategic alliances; restructurings and spin-offs; purchases, sales and leases of aircraft and aviation finance; commercial transactions and contracts; periodic reporting and securities law compliance; and corporate governance.

Photo of Jens Fischer Jens Fischer

Jens M. Fischer, a partner in the firm’s Corporate & Securities practice, focuses his practice on mergers, acquisitions and dispositions, public securities offerings, corporate governance, company-side stockholder activism, SEC and stock exchange compliance and private offerings.