Is The Risk Of Director Liability Really A 'Myth'?

Law360, New York (November 23, 2015, 10:24 AM EST) -- A recent scholarly article questioning the realistic financial liability exposure of corporate directors serves to prompt a larger discussion on the broad range of risks faced by directors, and actions that can be taken to mitigate those risks.

In the interesting and well-written piece, "Seven Myths of Boards of Directors,"[1] professor David Larcker and Brian Tayan identify seven common presumptions about board service that the authors believe are not substantiated by empirical evidence. "Myth Six" is that corporate directors are exposed to "significant personal legal and financial risk" arising from their service.[2] Relying in part on an updated 2006 study, the...

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