Cybersecurity: The Evolving Role of General Counsel

Cybersecurity: The Evolving Role of General Counsel

In an unprecedented move, Yahoo has placed a significant amount of blame on the company's legal department for its handling of the massive 2014 data breach that affected over 500 million accounts. An independent Board level review found that Yahoo senior executives failed to "properly comprehend or investigate" the 2014 data breach and found serious deficiencies concerning the management and reporting of the crisis.

The company's actions underscore a significant trend as it relates to the role of the legal department concerning cybersecurity risk.  This trend continues to shift cybersecurity issues from the IT department to the legal department.

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Should the Roles of Corporate Secretary and General Counsel be Separated?

Should the Roles of Corporate Secretary and General Counsel be Separated?

Prior to the enactment of the Sarbanes-Oxley Act (“SOX”) in 2002, most companies treated the role of the corporate secretary as a part-time role designed to satisfy the state corporate law mandate that an officer of the corporation record the proceedings of board and shareholder meetings and keep custody of the corporate seal.   This general description of limited responsibility is what made its way into most companies’ bylaws and likely caused boards to attach the “Corporate Secretary” title to the title of General Counsel rather than appoint an independent Corporate Secretary.   However, considering developments in the law concerning attorney-client privilege and the evolution of the broad-based responsibilities of today’s Corporate Secretary in this time of heightened concern for corporate governance, it is now, more than ever, appropriate for Chairs of boards and CEOs to question why the role of Corporate Secretary is still typically combined with the distinctly different role of General Counsel.

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5 Steps Leading to a Successful Board Evaluation

5 Steps Leading to a Successful Board Evaluation

The NYSE requires that the board of directors and each of its three required committees conduct an annual self-evaluation to determine whether it and its committees are functioning effectively.  While NASDAQ does not have a similar mandate, most NASDAQ-listed companies conduct board evaluations, and more private companies are recognizing that board evaluations lead to better performing boards, better performing companies and, ultimately, enhanced shareholder value.  Indeed, in the last ten years, directors have devoted more time to understanding what effective board governance means and how they might modify their management oversight practices and board operating protocols.  Directors now embrace the board evaluation process as the logical first step towards ensuring their board is more effective tomorrow, than it is today. 

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10 Components of an Effective Insider Trading Program

10 Components of an Effective Insider Trading Program

If the Office of Fraud Detection and Market Surveillance of the Financial Industry Regulatory Agency (FINRA) has never conducted a review of trading activity in your company’s publicly-traded securities, then you might be living in ignorant bliss about the adequacy of your insider trading program.  At least, know this – just having a board-approved insider trading policy won’t cut it.  Every publicly-traded company needs an insider trading program.

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Corporate Governance - Who Owns It?

Corporate Governance - Who Owns It?

Corporate governance as it relates to the administration and operation of a business is very broad, cuts across the organization and includes a variety of “managers,” making it difficult not only to define, but also to discern who generally owns it.  If one looks at the statutory requirements concerning the responsibilities of the Corporate Secretary, the translation of those requirements to corporate bylaws and the practical implications of the role, it becomes clear that the earliest-formed roots of corporate governance are grounded in the office of the Corporate Secretary. 

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