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Insights

Aug. 12, 2021

I’ve Been Asked to Join a Special Litigation Committee (SLC). What Do I Need to Know?

By Scott N. Sherman, Josh R. Lewin, Edward Glickman

Corporate Compliance Insights

Companies are often tasked with investigating the alleged misconduct of their current or former officers and directors at the urging of shareholders. When a company receives such a demand, a thorough investigation performed by a committee of disinterested and independent directors, often called a special litigation committee, is the most effective method of dispute resolution for the company.

For those called to serve on an SLC, Nelson Mullins partner Scott N. Sherman and associate Josh R. Lewin recently published the first of a series of articles for Corporate Compliance Insights designed to provide a high-level overview of what they need to know when faced with the question: what does it mean to be a member of an SLC?

Their practical insights, along with those from a former SLC member, provide readers with an in-depth understanding of the role of the SLC in addition to steps they can take to ensure its effectiveness as a method for dispute resolution. Sherman and Lewin describe the two types of shareholder litigation, shareholder derivative lawsuits and shareholder direct lawsuits; SLC empowerment; the independence and disinterestedness of the SLC; compensation of the SLC; choosing counsel; and other experts.