Training for Tomorrow: 2021 Checklist for Entity Counsel Supervising the Creation or Renewal of an Executive Protection Program in the Age of “Cooperation”

The corporation laws of every U.S. jurisdiction permit corporations on the “clear day” (i.e., before an adverse claim arises) to agree to advance defense costs, indemnify, and insure presumptively innocent directors and officers against risks of liability that arise out of their good faith service to the corporation. States’ laws governing alternative entities generally leave the matter of “executive protection” for managers to the law of contracts. In both situations, courts justify protection programs as encouraging responsible and talented individuals to accept the weighty responsibilities these positions impose.
In 2012 and 2013, Business Law Today published checklists created by the Business Law Section’s Director and Officer Liability Committee to assist counsel in supervising the creation or renewal of executive protection programs. Both before and after its first publication, the checklist was vetted through exposure to and comment by attendees at ABA live and webinar programs and at a webinar given to members of the Association of Corporate Counsel. Case law, commentary, and further education in this area have continued to evolve since 2013. The Committee promised that it would update the checklists periodically to reflect changes in the law an