Corporate Governance in the Trump Era: A Note of Caution

Corporate Governance in the Trump Era: A Note of Caution

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In a recent article in Westlaw Journal Corporate Officers & Directors Liability, William R. McLucas and Rachel Murphy warn companies against relaxing their corporate governance and oversight standards due to expectations that under the Trump Administration, the government's law enforcement efforts with respect to corporate conduct may be less aggressive than what we have seen over the past decade or so. The authors cite cautionary tales from the fallout of the insider trading and savings and loan scandals of the 1980s and the Enron and Tyco accounting scandals of the 2000s as a warning that any expectation that the rules do not apply is often a prescription for an aggressive government crackdown. 

The authors advise that it's paramount that firms not become casual about compliance and that board members and senior executives continue to set the appropriate “tone at the top.” “Directors and those in the C-suites of corporate America should take extra care to ensure that the optimism over what is expected to be a more lenient regulatory climate does not erode the discipline required for sound corporate governance,” the authors note. Read the full article

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