The recent turmoil in the global markets has created significant uncertainty for many companies and raised questions for their directors about how that uncertainty affects a director’s role and duties. In talking to our clients about these issues, several questions routinely arise.

  • How does my role as a director change during times of uncertainty?

Let’s start with what does not change. A director’s role is still to manage the business of the corporation for the benefit of its stakeholders, which can include overseeing management, helping set strategy, and offering expertise. Whether you are an inside director (employee or officer) or an outside director (nonemployee or independent), your fiduciary duties remain the same—to inform yourself of the pertinent facts, act with the requisite care, and work to maximize value of the entire enterprise. The duty of care requires that directors exercise the care of a reasonably prudent person under similar circumstances and in the manner reasonably believed to be in the best interests of the corporation. And the duty of loyalty requires that directors act in good faith and refrain from self-dealing, usurping corporate opportunities, or receiving improper personal benefits in connection with their role as a director.