Doubts about general counsel serving on another company’s Board of Directors

The Corporate Grapevine of the ACC Docket, May 2011 at 142, mentions that Joia Johnson, the chief legal officer of Hanesbrands, has been elected to the Board of Directors of Crawford & Co., an insurance services firm (See my post of March 25, 2009: GC of McDonald’s on board of Aon Corporation.). I continue to be perplexed when general counsel serve on the Board of another company.

Who gets the director’s fees? What about recusals and conflicts of time demands (not to mention possible conflicts of interest if the two companies do business together). Unless a significant business link exists between the general counsel’s company and the Board company, what’s the benefit? Even then, or especially if the two companies compete or might compete, aren’t the potential conflicts entangling for the general counsel?

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