An American Bar Association task force recently outlined specific steps attorneys should take to become more independent of a client company's executive team. The task force recommends that lawyers sit in on board meetings and that they inform the board if they are replaced for questioning management decisions. Lawyers can reveal information about clients, the task force reiterates, if their services are used to further a crime that is "reasonably certain to result in injury to the financial interests of others." While this advice is geared to big business, ABA president Alfred P. Carlton Jr. says that "corporate governance isn't related to size -- good practices should always be established." Hillary Sale, a University of Iowa law professor, adds that new standards are necessary because "the line has been blurred as officers play increasingly large roles in corporations." The blurring is especially bad at small companies where people wear many hats.
Sep 1, 2003