Board members can be subject to various forms of litigation and removal liability.
When compliance programs fail, or when a crisis erupts, the board may be called upon to respond decisively with an effective crisis control plan. A sloppy insider trading policy is one of the easiest ways to trigger securities fraud liability. The SEC's newly adopted Rule 10b5-1, however, provides a broad new array of tools that can help senior executives and board members diversify their holdings while naturally reducing the risk of liability. However, substantial research indicates that the majority of corporate acquisitions fail. All Rights Reserved.