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Presentation Chapter 11

Presentation Chapter 11 - Roles and Responsibilities of...

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Click to edit Master subtitle style Roles and Responsibilities of Other Corporate Governance Participants Chapter XI
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Click to edit Master subtitle style Chapter Objectives: • Understand the advisory function of corporate governance normally provided by legal counsel,
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Click to edit Master subtitle style Key Terms Association of Investment Management and Research (AIMR) Investment bank National Association of Securities Dealers (NASD) National Investor Relations Institute (NIRI) Regulation Analyst Certification (Regulation AC)
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Click to edit Master subtitle style Legal Counsel SOX makes legal counsel an integral component of the internal processes of the corporate governance structure to monitor corporate misconduct. Corporate legal counsel should coordinate their activities and serve as (1) counselors to the board , its committees, and directors in carrying out their oversight responsibilities and fiduciary duty; (2) advisors to management in participating in the negotiation, development, process, documentation, and restoration of material business transactions; (3) gatekeepers to ensure compliance with all applicable regulations; (4) enforcement agents to evaluate risks associated with legal issues and to prevent violation of securities laws and engagement in corporate malfeasance, misconduct, and fraudulent activities.
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Click to edit Master subtitle style Communication with Legal Counsel 1. Communication between general counsel and independent directors. The Task Force of the ABA recommends that public companies adopt a routine practice of having regular and periodic executive session meetings with their general counsel and an independent committee of the board of directors to discuss real and potential violations of laws and the actual or potential breach of fiduciary duties. 2. Communication between outside counsel and general counsel. The Task Force of the ABA recommends that the general counsel (1) establish policies and procedures for outside lawyers to communicate with the general counsel facts and cases where an officer or employee is engaged in material violations of law or fiduciary duty, and (2) require outside lawyers provide important information and analysis of legal matters to the general counsel where appropriate action can be taken.
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Click to edit Master subtitle style Professional Conduct for Lawyers SEC rules for attorneys, established in August 2003, require corporate attorneys to report suspicions of fraud and violations of securities laws.
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