A New Player in the Boardroom: The Emergence of the Independent Directors' Counsel
Geoffrey C. Hazard
University of Pennsylvania
Edward B. Rock
New York University School of Law
U of Penn, Inst. for Law & Econ Research Paper 04-07
Over the last thirty years, the independent directors have occasionally been represented by independent counsel. Instances include: special litigation committees reviewing derivative suits; independent committees in parent subsidiary mergers and MBOs; and internal investigations of misconduct. We predict that, with the additional legal requirements imposed on independent directors by the Sarbanes Oxley Act and related changes to SEC rules and Stock Exchange listing requirements, the independent directors, especially those on the Audit Committee, increasingly will be represented on a continuing basis by independent legal counsel. Out of this will emerge a new figure in the board room: the Independent Directors' Counsel. We examine the advantages and disadvantages of adding this new actor in the boardroom, and consider issues posed and implications for corporate law and legal ethics.
Number of Pages in PDF File: 23
Keywords: Sarbanes Oxley, directors, legal ethics, corporate governance
Date posted: March 19, 2004
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