TheCorporateCounsel.net

Over the years, I’ve represented a few directors who were considering resigning from public company boards, and it’s always a difficult situation. Even if the company is heading in a direction they don’t agree with or they have ethical concerns, few board members find it easy to step down. This recent Perkins Coie blog addresses those difficulties, and this excerpt provides some tips for directors on how to handle their departure in a responsible fashion:

1. Assess what’s making you uncomfortable.

2. Do all you can to seek to address the issues. That includes the need to create a record (that’s important, to come up with some sort of documentation) – that the board has taken all the possible steps to address any improper or possibly illegal actions identified at the company. You want to establish a clear record that you – and any fellow resigning directors – have done all you possibly can to address the malfeasance, illegality or impropriety. Then, in anticipation of resignation, circulate a draft statement of the reasons, the efforts taken, and how those efforts have been stonewalled.

3. Pass the baton. So then – before you leave remember that your successors on the board will need to grapple with many of the same issues. So do a thorough baton-passing to the directors who are remaining or coming on board.

– John Jenkins