In today's law enforcement environment, business entities facing criminal investigations and possible indictment have little practical choice but to cooperate with authorities. Cooperation offers the opportunity to avoid a costly trial and attendant adverse reputational, financial, and morale impacts. Resolution of potential criminal charges, however, almost always requires entities to cooperate with law enforcement efforts to impose criminal liability on individual business executives.
While businesses and their executives once generally perceived their interests as closely aligned, the “Cooperation Revolution” of the last few decades has forced corporate boards and business executives to reassess their individual obligations and risks. In so doing, they often turn to corporate lawyers, particularly general counsel, for assistance in evaluating and enhancing executive protection plans encompassing exculpation, indemnification, and fee advancement. These questions raise complex substantive issues and--because corporate counsel owe their fiduciary obligations to the entity itself--the evaluation and design of plans created to protect individuals often raises challenging ethical dilemmas. Legal advice provided on a “clear day” when the possibility of involvement in a criminal investigation seems remote may be perceived very differently on a “stormy day” when law enforcement officials are at the door.
The purpose of this article is to explore the evolution and ongoing impacts of the “Cooperation Revolution” on business entities and their directors, officers, and lawyers with a particular focus on how corporate counsel can advise governing bodies on executive protection plans in ways that offer the best possible assistance to their clients while appropriately protecting themselves.
Sarah Helene Duggin, The “Corporation Revolution” and the Professional Ethics of Giving Advice on Executive Protection Issues, 77 BUS. LAW. 1079 (2022) (with Shannon “A.J.” Singleton & James D. Wing).