Emerging Communications: Enhanced Director Liability for Experts?

Published in The Metropolitan Corporate Counsel, January 2005.

Sitting on a board of directors today is a more serious undertaking than ever before. The obligations, and potentially the liabilities, of directors have been significantly heightened by corporate governance reforms under the Sarbanes-Oxley Act of 2002, the rules of the stock exchanges and, perhaps now, the evolution of Delaware’s case law on directors’ fiduciary duties. As a result of the Delaware Chancery Court’s recent decision in In re Emerging Communications, Inc. Shareholders Litigation (Emerging Communications),¹ current and prospective directors would be well-advised to consider not only their own qualifications, skills and time commitments, but also the expertise of their colleagues around the board table.