Year 2000 Diligence From The Corner Office

Introduction

Most directors and officers have heard about the serious threat facing the business community due to the Year 2000 problem. Most also have heard that the company's Year 2000 risks extend far beyond its internal systems to the key trading partners and service providers on which it depends for its day-to-day existence. Nevertheless, recent studies indicate that most companies have not yet completed assessing their Year 2000 risks, while others have not yet begun that process. Given these circumstances, directors and officers should recognize the risks they face from failing to address their company's Year 2000 issues immediately. This article explains how directors and officers can use the business judgment rule as a guide for actions they may take to minimize their corporation's year 2000 risks and to minimize their own exposure to liability for failing to discharge their duty of care regarding Year 2000 risks.