A primary reason why, explains The Conference Board, is because of all the uncertainty. Among the sources for that uncertainty are:
The election of Donald Trump
Changes at the SEC. and
So, it's no surprise that legal experts are focusing in on any liability the board of directors might have at the Weinstein Co.
Essentially, reports LawNewz, lawyers say the issue boils down to the old: What did they know and when did they know it.
If the members of the board were aware of Harvey Weinstein's alleged sexual misbehavior, they had the duty to correct that problem. That's because it could cause corporate harm.
One document which lawyers contend must be examined is Weinstein's employment contract with the company. As LawNewz explains:
" ... [It] had provisions that arranged for him [Harvey Weinstein] to pay the company if they had to pay settlements or legal judgments for behavior that violated their code of conduct."
However, that provision, in itself, does not mean that the directors were, at the time, aware of alleged violations of the code. The wording could be interpreted as a hypothetical.
At 21st Century Fox, there arose a different issue related to governance. The SEC began to investigate after it was discovered that the board did not inform shareholders that funds were being spent on the settlements of alleged sexual misconduct. That was material information. Those settlements were made to protect the brands of Roger Ailes, Fox News and corporate parent 21st Century Fox.
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