Accounting and corporate fraud scandals at some of the world's largest corporations have made corporate governance a critical issue for many companies and their shareholders. Under the Sarbanes-Oxley Act, executives and directors are now held personally accountable for a company's financial statements, and must certify the truthfulness and accuracy of those statements. If a corporation or its executives fails to exercise the principles of sound governance, they may face such consequences as shareholder litigation against the company, management, and board of directors as well as delisting from trading exchanges.
Under the provisions of the act, corporate board members must also address the issues of CEO compensation, board compensation, stock options, transparency, crisis management and business continuity, succession, and environmental due diligence. Penalties for non-compliance can include not only civil and criminal fines, but also prison time.
As a result of the current climate, insurers have tightened the terms and conditions for directors and officers (D&O) policies. The most favorable coverage is restricted to corporations that can show they have sound corporate governance measures in place; specifically, companies that have undergone a board assessment performed by a third party.
With more than 1,000 Global professionals dedicated to D&O, leading expertise in a wide variety of industries, and a solid business relationship with most of the insurance markets, the FINPRO product offering at Marsh offers your business comprehensive executive risk solutions tailored to your business. We’re committed to the success of your business—and to helping you achieve the rewards that lie on the other side of risk.