Directors and officers liability (D&O) insurance is a critical component of almost every organisation’s risk management program. All organizations—regardless of their size, mission or structure—have some form of D&O exposure.
There are a number of strategies organizations can implement today that will protect their leadership team well into the future. For directors and officers, the first line of defense from a claim is to have a deep understanding of their responsibilities. In general, all directors and officers should be aware of the following:
- Their specific duties and obligations
- Their responsibility to the corporation
- The role they fulfil on the board or in a management capacity
- The expertise they are expected to bring to the position
Another way to develop a risk management strategy for directors is to help them understand the various sources of D&O liabilities that they can face. The following are strategies companies can use to build a strong risk management practice for directors and officers:
- Provide regular training on roles, responsibilities and liabilities they face.
- Establish and implement policies and procedures for directors to follow
- Establish a formal and a strong reporting mechanism for directors to receive information
- Document all decisions and processes
- Help directors in their decision making and having a strong legal counsel and support
Please login or Register to submit your answer