Looking Ahead 2020: D&O Considerations for the Next Calendar Year

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Boards may be ready and willing to rise to

Everyone thinks they understand insider

the challenge. Unfortunately, an impediment

trading rules, and as a result, can sometimes

to success is the lack of consistent, industry-

become a little casual about them. The SEC

wide agreements on what these terms mean

and the US Department of Justice (DOJ)

and how to measure them.

continue to bring insider trading cases,

That does not, however, mean that boards are off the hook. A number of third parties have jumped in to offer definitions and measurement standards. Boards in 2020 will need to refine (and for some, select for the first time) the working definitions and measurable goals they have selected for their companies—and to then be clear in their disclosures about these choices.

showing that it doesn't pay to joke around about these matters.

2.9 Ways to Reduce Your D&O Insurance Premiums The difficult D&O insurance litigation environment is one of many reasons we are seeing the D&O insurance market reset pricing. Companies are using this as

In addition, boards will want to stay in front

an opportunity to re-examine their D&O

of political issues that may impact their

insurance purchase decisions.

companies, whether due to a consumer campaign or as a result of employee activism.

In 2020, we expect companies to continue to examine the data driving their purchase

2.8 Government Investigations and Prosecutions

decisions. In some cases, companies will elect

Like the ocean, it's never a good idea to turn

D&O insurance programs.

to retain their traditional programs. In other cases, we will see a radical restructuring of

your back on the government. Directors and officers must always be vigilant when it comes to legal compliance. For example, the Foreign Corrupt Practices Act (FCPA) is a perennial favorite of regulators, and the Securities and Exchange Commission's whistleblower program shows no sign of easing up.

LOOKING AHEAD 2020 | WOODRUFF-SAWYER & CO.

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