Monday, August 09, 2004

D&O insurance- a necessary tool for attracting good Ds and Os

Bizjournals takes a look at how executives are becoming more discriminating in serving on company boards, and how the right directors and officers risk management program can help your company attract the best:

Also, the Sarbanes-Oxley Act, which went into effect a year ago, now holds directors more accountable for the accuracy of a company's financial reports and quarterly reports, which could open the door to more shareholder lawsuits.

The majority of board members still know very little about directors and officers insurance or even understand the policies held by the company, according to Chuck ReCorr, the managing director of the Research Triangle chapter of the National Association of Corporate Directors.

"A company can indemnify the directors, but they are being protected at the shareholders' expense, so it is limited," ReCorr says. "Some directors are buying individual insurance policies to add another layer of protection for their assets."


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