In-House Counsel

An administrative task, not a legal task: annual certifications of directors

By Rees Morrison

Publicly-traded companies must collect from each of their board members and ?named executive officers? (the top five by compensation as well as the CEO and CFO) a signed certificate regarding their possible conflicts of interest. The form is based on SEC rules and regulations but it may need to be updated each year for the 10-K.

The company?s independent accountants may also need a certificate from board members regarding relationships with the accounting firm. That form typically is shorter and takes less time to fill out.

A lawyer in the law department certainly may need to review the 10-K forms if any issues surface, but it is an administrative burden that should not fall on the legal department to collect and bird-dog either of the forms (See my post of April 9, 2008: quasi-legal tasks with 14 references.); and Dec. 12, 2007: Boards with 18 references.).

Full post as published by Law Department Management on March 29, 2009 (boomark / email).