NACD Board Leadership Conference NACD Chapter System

D&O Insurance: How to Get It, Keep It and Use It

June 12, 2018
Summit, NJ



NACD_D&O Insurance

Discussion Summary & Key Takeaways 
Here's What You May Have Missed:

Directors and Officers Liability Insurance (D&O) was on the NACD NJ agenda for June 12, 2018.  Both panelists and attendees came prepared for a lively and highly informative discussion, and they were not disappointed.

NACD NJ board member Frank Gatti served as moderator and pulled together two players from different perspectives of the D&O landscape. First was the insurance broker, responsible for policy design, pricing, and product sourcing from carriers. 

On the other end of the spectrum was the litigator, whose services come in to play when the insurance carrier and the policy holder must resolve differences with the advice and counsel of a litigator.

Representing the insurance brokerage perspective was Joe Reynolds, senior vice president of AON Financial Services. Andy Stern, a Partner at Sidley Austin, spoke to the role of the litigator. 

Joe and Andy were well matched in their down to earth, practical approach to a truly arcane and complex topic. Frank, with his own deep C-suite and corporate governance board experience, led things off with an informal survey of those who have been sued under their D&O policy at least once. He used this as a basis for stressing the importance of knowing your coverage and limits and, as important, participating directly in the evaluation of policy comparisons. Frank also commented on the importance of D&O coverage for not only public, but private, not-for-profit, tax exempt, and shareholder controlled enterprises.

In the policy discussion, there was strong agreement on the importance of knowing not just what is in a proposed policy, but what is NOT in it, also known as Exclusions. Policies can vary significantly on what is excluded. The time to know what coverage you don’t have is when you are comparing policies and prices, not after you’ve being sued.

As they answered questions from attendees, Joe and Andy illustrated the importance of well-informed, skillful advisors on both sides of the D&O equation.

Some key take-aways from the expert panel:

  • In recent years, there have been significantly fewer awards made in favor of plaintiffs and against companies and directors. However, settlement and legal costs have risen substantially.
  • Directors of non-profit organizations often believe they don’t need D&O coverage. This is a serious oversight. Non- profits have a great deal of exposure from areas such as protection of patient identities and dissatisfied donors.
  • Reservation of a slice of coverage for directors was strongly recommended, avoiding the possibility of coverage being depleted to support claims against the company and its officers.
  • Policies should include investigative cost coverage. Similarly, individuals should have pre claim coverage.
  • Carriers insist on timely and accurate notice compliance and policyholders must be diligent.
  • A Representations and Warranties policy (Reps and Warranties) is useful for M&A transactions.
  • Directors should ask questions directly of the broker and not rely on a company intermediary, who may have conflicting objectives, e.g., relatively small cost savings in exchange for coverage reductions.
  • Boards should engage an advisor to assist in selecting a policy and coverage.
  • As above, understand the exclusions. Know the implications for the entity and the board.

Discussion Leaders


Joe Reynolds

Joe Reynolds
Senior Vice President, Team Leader
Aon Financial Services Group

Joe Reynolds is a senior broker and co-team leader of a deal team in the New York office of Aon’s Financial Services Group (FSG).  The FSG group designs and negotiates insurance programs for a wide variety of commercial and financial institution clients.  Joe is directly responsible for the evaluation, design, marketing and implementation of the management liability programs.  Joe oversees the day to day servicing of his clients, as well as maintaining and enhancing market relationships. Joe earned a BS in Finance from Rutgers University and an MBA in Finance from Seton Hall University.

Andrew Stern
Andrew Stern
Sidly Austin LLP

Andrew Stern co-leads Sidley Austin’s Securities and Shareholder Litigation team, focusing his practice on securities litigation and litigation relating to mergers and acquisitions and corporate governance issues. These matters frequently involve allegations of violations of the federal securities laws and common-law fiduciary duties, as well as claims of market manipulation and antitrust violations.  Andy also represents companies and directors involved in M&A transactions in litigation arising from the transactions and counsels companies, boards of directors and other individuals on corporate governance matters and litigation risk. He also conducts internal and independent investigations on behalf of companies and independent directors.



Frank R. Gatti

Mr. Gatti has been a board member of numerous public, private and tax-exempt companies and served on numerous committees: Special, Finance, Audit, Nominating/Governance, including the $1.8 billion sale of Blackboard, Inc., a public global SaaS company. He has been involved with over $10 billion of M&A; Turnaround; Transformation; Credit Ratings; Investor Relations and Benefit/Compensation Plans. He now serves on the Boards of NACD/NJ, and H.S. Grace & Co. and, the Finance Committee of The Conference Board. He has served on the Boards and chaired the Audit Committees of: Blackboard, Inc.; Peoples Educational Holdings, Inc. and Prometric, Inc. From 1997-2011 he served as CFO/Office of the President at ETS (global  assessment, license & certification) and partnered with its Board to implement a 2-year $100 million Turnaround.  He was directly involved with a Transformation Strategy that quadrupled revenues to $1.3 billion by 2011.  Prior, he was VP/Financial Management and VP/Chief Accounting Officer at The New York Times Co. and was directly involved in 50 transactions to transform it into a media conglomerate: newspapers, magazines, broadcasting & cable TV. By 1997 revenues increased six-fold to $2.4 billion.  Mr. Gatti began his career with Deloitte.


7:30 a.m. - 8:00 a.m. Networking & Breakfast 
8:00 a.m. - 9:30 a.m. Program and Q&A

Location and Time


Canoe Brook Country Club
1108 Morris Turnpike
Summit, NJ 07901



Question about this Event?

Contact New Jersey Chapter 32 Leonardine Avenue, South River, NJ, 08882 phone: 732-698-7771 fax: 732-698-7772 email: