Jenner & Block

National Association of Corporate Directors Magazine Article Recaps Valukas' Keynote Speech on Lehman

Jenner & Block Partner Anton R. Valukas was featured in a recent NACD Directorship article titled, “The Examiner,” which discusses Mr. Valukas’ keynote speech at the 11th annual NACD Directorship 100 Forum.  The article is an excerpt of Mr. Valukas’ remarks on the issues leading up to the Lehman Brothers bankruptcy and the implications for corporate boards of directors in this environment of heightened scrutiny from regulators and investors.

Mr. Valukas told the audience at the Forum that “Lehman’s board could not have anticipated the storm that hit them, but future boards will be charged with the knowledge that such storms do exist, and more will be expected of them in the future.”  He went on to say that, “It’s understandable that Lehman’s board accepted management’s report that Lehman had adequate liquidity under its stress tests, without drilling down to ask whether those stress tests were sufficiently comprehensive, and did they really cover the areas that were at risk... It is understandable that Lehman’s board did not ask the question that would have elicited management’s responses to the use of Repo 105 to reduce leverage.  Future boards are definitely going to be asked - they’re going to have to be asking the questions about off balance-sheet transactions and window dressing.”

Mr. Valukas stated that “it was management’s job to manage, but it was the board’s job to understand whether management was paying proper attention to risk, whether it had designed proper stress tests to assess risk.”  He concluded that, “the point is, now we do have hindsight, and the light shined on their conduct, their lack of conduct, does not flatter. Boards in the future will be expected to do more.”

Mr. Valukas is Chairman of Jenner & Block and is a partner in the Firm’s Litigation Department.  A former United States Attorney, Mr. Valukas specializes in major civil and white collar criminal litigation, representing individuals and leading corporations in contested proceedings throughout the nation.  Mr. Valukas has been lead counsel in a wide variety of matters relating to government contracts and issues of fraud and compliance.

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