“Director Data Requests – The Line Between Oversight and Management” from Sullivan & Cromwell addresses what management can reasonably expect from the board in the way of requests for data and other information to facilitate their oversight responsibilities, and how to manage requests that may appear to overstep the line between board oversight and management responsibilities. The memo discusses directors’ rights to information necessary to discharge their duties under Delaware and other corporate laws; how those rights may manifest in companies’ governance documents; and areas of management discretion to determine relevant, reliable, and material information.
Importantly, the memo imparts practices and procedures management and the board may consider to avoid or mitigate misalignment between management and the board about the flow and content of information, including establishing a single point of contact internally to field and coordinate responses to requests for information; sharing management’s responses to requests with the full board or committee to avoid selective sharing concerns; coaching or education for directors who may consistently seek to delve into operational matters; channeling director questions toward a structured discussion; and other useful tips.
This post first appeared in the weekly Society Alert!