2.3.3.6 Interviewing legal counsels, insurers and risks advisors

The fifth method of data collection involved 10 additional interviews with legal professionals, insurers and risk managers. I spoke with 2 legal counsels, 1 company secretary, 3 company lawyers, 2 insurers and 2 risk managers. These interviews served to reflect on and to validate the findings I obtained from the interviews with the directors.

Moreover, I assumed that these professionals are an important source of information for directors when assessing their liability risks. For instance, the legal professionals with whom I spoke had regularly attended board meetings or had formal and informal contact with some of the directors involved in this research. Their observations enabled me to review my findings on the directors’ perceptions of liability risks. For instance, I was told that the directors they advised were interested and eager to be informed about directors’ liability risks and about how certain business decisions could entail personal liability risks. Moreover, the legal counsels with whom I spoke felt it was their responsibility to provide directors with ‘state of the art’ protection in order to facilitate ‘good corporate governance’. Furthermore, I was told by one of the legal counsels that his legal team was keen to update their board of directors with new case law material on liability risks. Indeed, three of the directors who I interviewed, could spontaneously cite sentences from several court decisions.

The insurers told me that claims were increasing and were being filed more promptly. These observations suggest an increase of litigiousness. Unfortunately, the insurers had no statistics to support their statements. The risk managers described the D&O insurance market as a ‘soft market’: ‘there is overcapacity’. Premiums are relatively low. Powerful companies are in the privileged position to extend their coverage and increase the sum that they wish to insure against low costs. It was their belief that many of the larger companies had done just that. Unfortunately, there were no accompanying statistics to provide evidence for this view.