It seems as though the accounting rules that just a few short years ago seemed to be carved in stone and generally accepted by almost all businesses, are now more like accounting questions that are subject to ongoing challenge, discussion and debate. It also appears that rules governing the once sacrosanct relationships between corporate counsel and senior-level corporate executives are also now open to ongoing discussion.
These new rules, established under the Sarbanes-Oxley Act of 2002 and enforced by the Securities and Exchange Commission, require both in-house and outside lawyers who see evidence of any "material" wrong-doing in businesses to report it up the corporate ladder. This rule is causing quite a stir in the executive ranks, where all business-related discussions between corporate executives and corporate counsel were previously considered protected under the attorney-client privilege.
Senior-level executives, who were once comfortable discussing sensitive legal matters and tough business decisions with corporate counsel, aren’t quite as conversational anymore. These now tight-lipped corporate executives feel that frank and open discussions with their corporate counsel may not be in their best interest, and at some point could be used against them in a court of law. The fear of being dragged into court, or worse, being dragged in front of their Board of Directors, has many of them taking a vow of silence.
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