Director Liability In The New Era Of Corporate Governance

The last few years have witnessed an explosion of corporate scandals. Class actions, legal proceedings and investigations have grown exponentially since the early 2000s and regulators have broadened the scope of personal accountability to include corporate directors.

To restore investor confidence and thwart future scandals, American and Canadian regulators have scrambled to implement corrective legislation with greater due diligence requirements and stiffer penalties for illegal and/or questionable practices.

As corporate ethics and accountability become the underpinning of today's corporate culture, directors would do well to take precautions to limit their personal liability. These measures may include demonstrating compliance with codes of conduct and ethics and other measures of due diligence.

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