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A New Player in the Boardroom: The Emergence of the Independent Directors' Counsel
Geoffrey C. Hazard University of Pennsylvania Edward B. Rock University of Pennsylvania Law School March 2004 U of Penn, Inst. for Law & Econ Research Paper 04-07 Abstract: 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.
Keywords: Sarbanes Oxley, directors, legal ethics, corporate governance Working Paper SeriesDate posted: March 19, 2004 ; Last revised: March 19, 2004Suggested CitationContact Information
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