Can Directors and Officers Be Liable If They Fail to Engage Shareholders’ Social Causes?

Second QuarterArticles PLUS Journal

In the 2017 Annual Corporate Directors Survey, recently released by PricewaterhouseCoopers, nearly 900 directors of U.S. public companies offered their perspectives on the most important issues facing corporate leadership. A common thread in the directors’ responses was the mounting pressure from shareholders to ensure that social issues are reflected in how their companies do business, as well as in the composition and governance of their boards. Diversity, equal and proper treatment of women, maintaining privacy in the face of ubiquitous technology and environmental issues, are among the pressing social concerns that shareholders are expressing to directors and officers. As directors and officers consider how they will take action to address these important social issues they must also consider the changing landscape of potential legal liability for their failure to do so. As shareholder pressure regarding these issues increases and theories of liability and corporate injury continue to evolve rapidly, the stakes for corporations and their directors and officers have never been higher.

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