Bank Directors Seminar, Coeur d'Alene, ID, September 15-17, 2019

MISCONDUCT – DIRECTOR DUTIES

Court Decision:  Directors have affirmative duty to monitor the corporation’s compliance with law and ethics. In re Caremark International, Inc. Derivative Litigation , 698 A. 2d 969 (Del. Ch. 1996)  “. . . a director's obligation includes a duty to attempt in good faith to assure that a corporate information and reporting system, which the board concludes is adequate, exists, and that failure to do so under some circumstances may, in theory at least, render a director liable for losses caused by non-compliance with applicable legal standards.”

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MISCONDUCT – DIRECTOR DUTIES

Sentencing guidelines :  Punishment is reduced if corporations disclose misconduct and create “effective” compliance and ethics programs. United States Sentencing Commission, Guidelines Manual 2018 , effective November 1, 2019, Chapter 8, Part B.2  “The organization’s governing authority shall be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.” Section 8B2.1(b)(2)(A)

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