One of the notable features of the last two proxy seasons is the increasing number of shareholder complaints of misleading or inadequate disclosure materials, with courts often issuing preliminary injunctions enjoining proxy votes. As a February alert from Day Pitney put it: "At a minimum, management should enter this proxy season with a clear understanding of disclosure obligations and an appreciation of how those obligations are being tested in today’s landscape." Given this new climate, we want to explore the role that lawyers, particularly general counsel, can play on boards.
The increased shareholder activism, which coincides with new government regulations and heightened expectations from company executives and customers, is causing CEOs and directors to consider more carefully the makeup of their boards. As their responsibilities and liabilities have expanded, board members want people at the table who can help them establish best practices at every level of the company. They want experts with specialized skills who can identify areas of risk, assess compliance policies and help accomplish strategic and financial goals. They want professionals who have excellent judgment and top problem-solving skills who have "been there and done that." As a result, the National Association of Corporate Directors reports that many companies are moving away from "relationship" boards to "skills and experience" boards.
