Special Committees of Independent Directors

Morris Nichols partners Andy Johnston and Mark Hurd are coauthors of the Bloomberg BNA Corporate Practice series Portfolio, Special Committees of Independent Directors. The recently revised treatise, updated on a roughly biennial basis, discusses special negotiating committees; demand investigation committees, and special litigation committees. Apart from their legal benefits in subsequent litigation, such committees can reassure the investigating public that a corporation is handling its affairs in a proper way.

The portfolio initially discusses the fundamental concept of “disinterestedness” and “independence” of committee members.

The portfolio then discusses the special negotiating committee and the types of transactions in which the committee is useful. The composition and the authority of the committee, as well as the compensation of its members, its need for advisors, and the conduct of its meetings, are examined.

In the litigation context, the demand investigation committee and the special litigation committee are reviewed. Legal standards governing the requirement that a shareholder plaintiff make a demand on the board of directors before commencing a derivative lawsuit are analyzed. The composition and authority of these committees are discussed, as well as the judicial review of committee actions.

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S. Mark Hurd, Andrew M. Johnston, Special Committees of Independent Directors, No. 79 Corporate Practice Series Portfolio (BNA)