Partner Lois Herzeca quoted, <i>D&O Advisor</i>,

Partner Lois Herzeca quoted, D&O Advisor, "Measuring Up: Regulators Think Self-Evaluations Will Help Fix Corporate Boards"

An article in the October 4th D&O Advisor entitled "Measuring Up: Regulators Think Self-Evaluations Will Help Fix Corporate Boards. But Are Director Surveys a Long-Term Solution, or Just Another Fad?" notes that "the question of whether and how to evaluate director and officer performance is a hot discussion item. Driving those conversations is the need to rebuild credibility in the wake of the corporate scandals at Enron Corp., WorldCom Inc., and other companies....However, there are several reasons why nearly half of the Fortune 1000 companies surveyed still don't conduct evaluations. The biggest concern is litigation: Companies worry that shareholders and others might use critical board reviews as fodder for lawsuits....However, Lois Herzeca, a New York-based partner with Fried, Frank, Harris, Shriver & Jacobson [LLP] who advises companies on corporate governance, argues that assessments might actually help businesses in court. 'If the board regularly undergoes a meaningful self-evaluation process, implements the recommendations of that process, and maintains a written record, it would be good evidence that the board took its fiduciary duties seriously - even if there is ultimately wrongdoing at the company that they did not uncover,' she says. But Herzeca also notes that self-evaluations aren't privileged information."