The US Justice Department Announces Recent Wave of Board Member Resignations Following Notice From its Antitrust Division
Zoom Info, Maxar, Udemy, and others are amongst the corporate companies that recently saw Board Members resign after being notified of conflict with the rules established within Section 8 the Clayton Act. This wave of several resignations was recently announced via an official press release to document and likely spread notice of their increased efforts. We may see more resignations from corporate board members following this news as conversations grow surrounding the topic.
Interlocking Directorates as Described in Section 8
According to Assistant Attorney General Jonathan Kanter of the Antitrust Division, Section 8 of the Clayton Act has historically been underenforced. This is expected to change moving forward as the efforts will now continue given the specific mention of this being the “first” in broader reviews being done by the Antitrust Division. These extensive reviews have a specific focus on searching for interlocking directorates.
Interlocking Directorates are individuals/entities who sit on two boards of companies that compete (or interlock) with one another. This situation is meant to be prevented because of antitrust concerns. Thus falling under regulations established by the Antitrust Division of the US Department of Justice.
Those who feel like they may be under scrutiny should review their standing in multiple boards to avoid potential penalties for being in violation of Section 8. There are contact details placed on the press release for those who want a direct place to call for more info as well.
Enforcement of Section 8 of the Clayton Act
Earlier this year, we saw initial comments made from the DOJ regarding the increased enforcement of Section 8. This was the start which led us to where we are today, where we finally see some of the real-world effects of these increased efforts. We should expect more resignations in the future since this effort is going to be continued.
Among the comments made by the Assistant Attorney General on April 4th, 2022, he also reminded us that there is a leniency program in place for corporations to report any wrongdoings they may feel are occurring. This is in reference to seeking out cartels and any possible business being conducted with them through US corporations.
Expecting More Resignations From Corporate Board Members
It is clear that this is only the beginning of the DOJ’s antitrust efforts, and we can expect more news to come in the future regarding conflicting board member positions. These regulations can prevent much wrongdoing that occurs within our economy, but it can definitely be a headache for those who are not specifically setting out to break the rules. Regardless of your well intentions, if you sit on multiple boards across corporate businesses, it may be best to start these conversations sooner than later.
