Innovators and Investors March 26 Meeting: Understanding Directors & Officers (D&O) Insurance and Board-Level Risk
The Innovators and Investors group held its March 26 meeting, featuring an in-depth discussion on Directors & Officers (D&O) Insurance—a critical topic for board members, investors, and executives involved in both private and public companies.
The session was led by Kevin M. LaCroix, Esq., Executive Vice President at RT ProExec, The OakBridge Team, who provided practical insights into the evolving risks associated with board service and corporate governance.
Key Considerations When Joining a Board
A central theme of the discussion was the importance of conducting thorough due diligence before accepting a board position. While many individuals confirm that a company has D&O insurance coverage, Kevin emphasized that coverage alone is not sufficient.
Understanding the structure of the policy, coverage limits, exclusions, and the overall risk profile of the organization is essential. Board members—whether serving public companies, private companies, or nonprofit organizations—can face significant personal liability and financial exposure.
Risks Extend Beyond For-Profit Companies
The discussion also highlighted that nonprofit board positions carry similar risks. Many individuals underestimate the potential liability associated with these roles, but governance responsibilities and legal exposure remain significant regardless of the organization’s structure.
Emerging Risks: AI, Cybersecurity, and “AI Washing”
As technology continues to evolve, new areas of risk are emerging. One topic that generated significant discussion was “AI Washing”—a term used to describe companies that overstate or misrepresent their use of artificial intelligence to attract investment.
When these companies fail to meet expectations, they often face litigation, with claims tied to misleading disclosures around AI capabilities.
Additionally, the growing impact of cybersecurity incidents was discussed as a major source of liability. Boards are increasingly being held accountable for failures related to data protection, risk management, and overall corporate oversight.
The Importance of Trusted Advisors
Given the complexity of today’s risk environment, the session reinforced the importance of working with experienced advisors who understand D&O insurance, governance, and emerging risk areas. A well-structured approach to risk management is essential for protecting both companies and the individuals who lead them.
A Forum for Education and Perspective
The Innovators and Investors group remains committed to fostering education, candid discussion, and shared perspective among its members. The group brings together leaders from private equity, venture capital, family offices, and operating companies to explore the real-world challenges of building, investing in, and advising businesses.
Through discussions like this, members gain practical insight into the risks and opportunities that define today’s business environment.
