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Insights

tomorrows global business

Sam Cooper and Joy Dowdle

March 06, 2017

By Paul Hastings Professional

Boards are facing tremendous pressure from regulators to expand their involvement in corporate affairs.

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Quite appropriately, boards may wish to enhance oversight, and should ensure that management has in fact identified the company’s specific risk profile and undertaken thoughtful, responsive measures to address it. While doing so, however, board members should remain mindful that their role (and one that provides them substantial protection from personal liability under Delaware corporate law) is to oversee corporate affairs and not to manage them. Preserving this distinction allows boards and management to function in the areas where they are best suited, while maintaining the personal protection afforded directors in their oversight role.