Managing Corporate Books and Minutes to Protect Privilege: Applying the Garner Test

This CLE course will advise corporate secretaries, in-house counsel, directors, and other governance professionals in implementing best practices for maintaining corporate books and records to protect privilege in anticipation of shareholder and other litigation. The panel will discuss the recent decision in Delaware on applying the Garner test to corporate records in shareholder litigation. The webinar will offer best practices and critical considerations for boards and their corporate secretaries when developing the agenda for board and committee meetings, compiling and distributing meeting materials, drafting and maintaining meeting minutes to retain privilege, and responding to shareholder requests for potentially privileged materials.

The routine minutes and records typically maintained by the corporate secretary form the foundation of corporate recordkeeping. Consider the following scenario: in anticipation of an upcoming board meeting, the company's general counsel prepares a report discussing the liability risks of pending litigation and potential exposure. The general counsel distributes the report to the members for their pre-meeting review, the board conducts the meeting, and the minutes reflect the discussion between the members and the lawyer. Months later, a stockholder serves a books-and-records demand or files litigation, culminating in a request for the production of the general counsel's board report and the board's meeting minutes.

The corporate attorney-client privilege protects from discovery confidential communications between the company and its lawyers made for legal advice purposes. With or without evidence, judges often hold that in-house lawyers engage in both legal and business roles in their day-to-day duties. For this reason, courts often scrutinize whether the in-house lawyer was providing legal or business advice. Thus, courts often require in-house counsel to clearly show, with evidentiary support, that the communication is primarily related to legal advice or the assessment of a legal issue.

A recent shareholder action brought against Facebook considered the extent of exceptions and limits of what the court will recognize as privileged among corporate records and helps identify what practices corporate counsel should adopt as best practices to maintain privilege in corporate records.

Listen as our expert panel discusses the limits of attorney-client privilege when a claim is brought against the company and best practices that corporate counsel should take when maintaining corporate books and records.