Directors and officers must act with due diligence in carrying out their responsibilities in the affairs for their organization.

The following are some of the exposures that Directors and Officers face:

Regulatory Proceedings
Regulatory bodies are today the primary source of claims under a D&O policy. While the policy does not respond to fines or penalties imposed upon finding of liability, the policy may provide defence costs to defend the action

Positions on Outside Company Boards
Active participation in managing your company's interests on the boards of outside companies is important but there are risks to be considered

Bankruptcy
Declaring bankruptcy is a reality for some companies, but that reality can carry significant liabilities for the company's board of directors. The Company's Act and insolvency regulations impose a duty not to conduct the company's business in a manner so as to defraud its creditors

Initial Public Offerings
Initial public offerings invite added scrutiny by unaffiliated third-party investors of past and present financial information, management decisions, the offering itself, etc, potentially resulting in costly and distracting litigation. There are stringent rules and regulations that governs filing of prospectus and other documents relating to the public offering

Employment Claims
Directors and Officers might find themselves mired in a suit or claim made against them brought by an employee alleging wrongful termination, discrimination or sexual harassment. Aside from these, corporate officers must be aware that there are duties imposed on them under the law.



Duties to act honestly and in good faith
Directors and corporate officers who discharge managerial functions owe the company fiduciaries duties such as the duty to act honestly and with the utmost good faith. Directors and officers must exercise their powers in the best interests of the company and the company alone

Conflict of Interest
A company director is under the duty to act bona fide in what he believes is best for his company. Without the informed consent of their company, directors must not place themselves in a position where their personal interests are liable to conflict with their duties to their company. The law requires that directors disclose personal interests at a meeting and obtain the consent of the Board of Directors.

Duty to act with utmost care, skill and diligence
A director is required to perform his functions with reasonable care and attend with due diligence and caution to the work entrusted to him.

Use of Corporate Information
Directors must not, without the informed consent of the company, use the company's assets, opportunities or information for their own benefit.