On This Week in the Boardroom (TWIB) TK Kerstetter, President,Corporate Board Member, discusses what conflicts of interest can mean to the company, board and individual director, with Holly Gregory, Partner, Corporate Governance, Weil, Gotshal & Manges and recently named once again the NACD Directorship 100.
First identify and disclose conflicts of interest policies. Have clear policies. Review them frequently. Independence determinations, gifting, Foreign Corrupt Practices Act… perceptions really do matter. Error on the side of caution to avoid reputational downsides. Make sure you have good books and records.
Also from Weil, Gotshal & Manges: the newest edition of The 10b-5 Guide, a survey of the extensive developments in 2010/2011 US securities fraud cases arising under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Weil’s Guide is presented as a primer and handbook to this important rule of US securities law that serves as the basis for hundreds of securities class action filings each year. Of late, many of these cases have been reviewed by the US Supreme Court, which over the past two years has issued more precedential 10b-5 rulings than it did over the previous 18. Another precedent-setting ruling will likely occur in the upcoming Amgen case, which is scheduled for argument before the Supreme Court this fall. Given the rapid influx of 10b-5 decisions at the district and appellate level, they hope The 10b-5 Guide can be a useful resource in this dynamic and challenging time.