Chubb Publishes Loss Prevention Guide For Independent Directors
WARREN, NJ, November 10, 2003 – The Chubb Group of Insurance Companies has published a guide to help independent directors understand their expanding roles
and risks associated with serving on a corporate board, as well as best practices for corporate governance.
A large part of the 35-page booklet, Loss Prevention Guidelines for Independent Directors, addresses corporate governance best practices, which have become increasingly important following recent corporate scandals
and the passage of the "Public Company Accounting and Investor Protection Act of 2002." The act, also known as Sarbanes-Oxley,
has redefined corporate conduct and the relationship between directors, officers, accountants, attorneys and analysts. Although
Sarbanes-Oxley was intended for publicly traded companies, many of the standards it sets are now being applied to private
and nonprofit companies.
"After Sarbanes-Oxley, independent directors want to know what is expected of them," said Andrew Pritchard, assistant vice
president of Chubb & Son and worldwide manager for Personal Directors Liability insurance at Chubb Specialty Insurance. "This
guide can help them understand their responsibilities and navigate the evolving role of independent directors."
During the past 30 years, companies have significantly increased the number of independent directors and expanded their roles.
Sarbanes-Oxley now mandates that audit committees be made up entirely of independent directors.
"Everyone, from legislators to regulators to shareholders, expect independent directors to play an important role in restoring
trust and confidence in corporate governance," Pritchard said.
The guide is also a useful tool for corporate managers who seek a better understanding of issues related to corporate governance
and independent directors. Included in the booklet is a section on selecting, recruiting and retaining independent directors.
Also included are:
- a discussion of the various board committees on which independent directors may serve, such as audit, nominating, compensation
and corporate governance;
- a section on providing financial protection for independent directors, such as corporate indemnification and directors and
officers liability insurance; and
- recommendations for corporate governance best practices, including requiring that boards be composed of a majority of independents
and that independent directors meet regularly without management present to assess company operations and management’s performance.
A leading provider of directors and officers liability insurance, Chubb also offers a Personal Director’s Liability Insurance
policy, which can help independent directors protect their personal assets when they are sued by shareholders and others.
The policy, with its personally dedicated policy limit, provides coverage to independent directors when certain losses are
not indemnified by their companies or paid by other directors’ and officers’ liability insurance.
To obtain a free copy of Loss Prevention Guidelines for Independent Directors, contact your independent insurance agent or call (866) 282-9001 and request form number 14-01-0679.
The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property
and casualty insurance for personal and commercial customers worldwide through 8,000 independent agents and brokers. Chubb’s
global network includes branches and affiliates in North America, Europe, Latin America, Asia and Australia.
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