♣ to the audit committee, as in the GM case. NYSE requirements require the audit committee to discuss policies with respect to risk assessment and risk management. However, the NYSE commentary clarifies that the “audit committee is not required to be the sole body responsible for risks assessment and management” [See Part I, Exhibit C Rule 303A.07(b)(iii)(D)]. If the board allocates risk responsibilities to the audit committee, these responsibilities should be thoughtfully addressed in the charter. Members should carefully guard against accepting responsibilities beyond those mandated by appropriate governing organizations for which they do not have either time or expertise.
♣ Before serving, consider the time commitment. The NYSE provides …show more content…
This case presents a classic example of the difference between allegations of a breach of the duty of care (involving gross negligence) as opposed to the duty of loyalty (involving allegations of a bad-faith conscious disregard of fiduciary duties). The conduct at issue here, as pled, falls short of an utter failure to attempt to establish information or reporting systems, a conscious failure to monitor existing systems, or conduct otherwise taken in bad faith (p. …show more content…
• Use your authority to engage independent counsel and other advisers, as the audit committee determines necessary to carry out its duties. Consider whether senior management and/or the audit firm may be implicated and whether outside counsel unaffiliated with the company is warranted.
• Follow up on significant warning signals, such as reports from the auditor, internal audits, and SEC investigations.
• Ensure that the committee has appropriate funding determined by the audit committee for compensating the independent auditor, advisers employed by the committee, and ordinary administrative expenses necessary or appropriate in carrying out its duties, as required by SEC Rule 10A-3(b)(4).
• See SEC Rule 10A-3; Lernout III; In re AgFeed; In re Veeco; NYSE Rule 303A.07(b)(iii)(A) – (H).
Review and Perform All Other Duties:
• Review all duties required by law, listing requirements, and the Audit Committee
♣ Before serving, consider the time commitment. The NYSE provides …show more content…
This case presents a classic example of the difference between allegations of a breach of the duty of care (involving gross negligence) as opposed to the duty of loyalty (involving allegations of a bad-faith conscious disregard of fiduciary duties). The conduct at issue here, as pled, falls short of an utter failure to attempt to establish information or reporting systems, a conscious failure to monitor existing systems, or conduct otherwise taken in bad faith (p. …show more content…
• Use your authority to engage independent counsel and other advisers, as the audit committee determines necessary to carry out its duties. Consider whether senior management and/or the audit firm may be implicated and whether outside counsel unaffiliated with the company is warranted.
• Follow up on significant warning signals, such as reports from the auditor, internal audits, and SEC investigations.
• Ensure that the committee has appropriate funding determined by the audit committee for compensating the independent auditor, advisers employed by the committee, and ordinary administrative expenses necessary or appropriate in carrying out its duties, as required by SEC Rule 10A-3(b)(4).
• See SEC Rule 10A-3; Lernout III; In re AgFeed; In re Veeco; NYSE Rule 303A.07(b)(iii)(A) – (H).
Review and Perform All Other Duties:
• Review all duties required by law, listing requirements, and the Audit Committee