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Hidden Dangers In Overly-Generous Deeds Of Indemnity For Directors.

Publication: Mondaq Business Briefing
Publication Date: 28-OCT-02 		Format: Online - approximately 820 words
Delivery: Immediate Online Access

Article Excerpt
The recent community outrage over excesses of some directors will throw a sharp spotlight on deeds of indemnity that are overly-generous to directors, said Emilios Kyrou, partner, Mallesons Stephen Jaques, at the LexisNexis Corporate Governance Summit held on 28th October in Sydney.

Mr Kyrou said that, since about 1995, it had become standard practice to indemnify directors to the maximum extent permitted by the law. In some cases, this occurred without sufficient focus on whether the indemnities were fair and reasonable from the point of view of the company.

"In the current environment, there is a risk that a one-sided deed may come before a court, and that it may not survive judicial scrutiny," said Mr Kyrou.

"It is important for companies...

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