Evolving Directors & Officers Liability Environment

In Brief: The legal landscape for board members is complex and risky—recent developments include increases in securities lawsuits, M&A litigation, and emerging threats from claims related to cybersecurity, data privacy, climate change, and more. Marsh and NACD have compiled a collection of brief articles accompanied by key takeaways, checklists, and questions for boards related to a range of timely directors and officers (D&O) liability issues, including:

• The annual D&O approval process

• D&O considerations for private-company boards

• M&A, cybersecurity, and global-company D&O trends and implications

• Regulatory and employment claims investigations

The focus on the board’s compensation committee has never been sharper. The components of compensation plans and the link between compensation and company performance are under intense scrutiny from shareholders, employees, policymakers, the media, and other stakeholders. The Report of the NACD Blue Ribbon Commission on the Compensation Committee revisits NACD’s 2003 Report of the NACD Blue Ribbon Commission on Executive Compensation to highlight the new environment in which compensation committees—and, more broadly, boards—are now operating. It recommends that the compensation committee and board work together to establish an executive compensation philosophy that supports the company in creating long-term, sustainable value.

The report includes ten specific recommendations for compensation committees to consider when evaluating their compensation philosophies. It also provides practical tools, such as sample compensation committee charters, a compensation committee assessment, and guidance on executive employment contracts.