Preventing the Next Crisis - Director & Officer Liability for Enterprise Risk Management

To what extent were corporate boards and officers responsible for our recent financial crisis? To what extent did the legal system actually hold them accountable? Is there a disparity here that needs to be addressed, or should the rule precluding judicial review of business decisions also apply to enterprise risk management?

Those of you who are particularly interested in these questions, or the Preventing the Next Crisis panel more generally, may want to read the article Caremark and Enterprise Risk Management, by Stephen M. Bainbridge of the UCLA School of Law. The article provides an excellent overview of the current state of director and officer liability for breaching the duty of care to shareholders, and the potential applicability of this category of shareholder derivative suit, a.k.a. Caremark claims, to risk management.

Managing our systemic financial risk going forward will, as the language itself implies, require solutions from all corners of our current system. I'm excited to hear the various solutions our conference attendees have to share based on the unique personal experiences each of us brings. I encourage you to start the discussion now, through comments on this blog, to expand the conference's "marketplace of ideas."