I went to a joint FEI (Financial Executives International) / NACD (National Associate of Corporate Directors) event in Palo Also and saw a former Chancelor of the Delaware Chancery William Chandler III (and current partner at Wilson Sonsini Goodrich & Rosati) speak on “Do’s and Don’ts for Corporate Directors”. Here’s his top 10 list:
- Process matters. Courts and judges love process. Need to follow process.
- Be active and be engaged. Get materials and read them. Ask questions.
- Build a good record. Follow an exemplary process…a robust, thoughtful process. Need to show that you considered all options. Use outside council.
- Don’t write stupid e-mails (hopefully, this e-mail doesn’t fall into that category). If you write something in an email, it will never go away. Don’t talk about other people in a negative way over e-mail. Period.
- Get good advisors, but don’t advocate responsibility entirely to them.
- Avoid conflict or related party transactions.
- If you’re using a special committee, do it right. Avoid conflicts of interest. Avoid personal and business conflicts.
- Setup oversight systems to ensure compliance and fiduciary responsibility.
- Be bold, take chances and take some risks.
- Be the hero, not the villain. Write the script so that you are considered the good guy.
These are great rules to live by.