Connecticut House Bill HB06640

Connecticut 2013 Regular Session

• Introduced: 3/12/13
• Refer: 3/12/13

Caption

An Act Amending The Connecticut Business Corporation Act.

Impact

This bill reflects a significant shift in the balance of protections available to corporate officers. By aligning Connecticut's statutes more closely with the Model Business Corporation Act, HB 6640 seeks to improve consistency in how corporations manage risk and liability regarding their leaders. The impact of these changes is expected to facilitate more effective governance structures within corporations and may influence the manner in which corporate entities operate and engage their officers and agents, particularly in contentious or litigious environments.

Summary

House Bill 6640, titled 'An Act Amending The Connecticut Business Corporation Act,' aims to reform several aspects of the existing corporate governance framework within Connecticut. The bill introduces provisions that focus on the indemnification of corporate officers, employees, and agents, expanding the scope of protection offered to those acting on behalf of a corporation. Specifically, the amendments allow for broader indemnification rights and the potential for corporations to maintain insurance coverage for liabilities incurred by their directors and officers, thereby enhancing the protective measures available under corporate law.

Contention

While the bill generally garners support from business groups striving to safeguard their leadership, it also faces scrutiny from advocates concerned about the potential implications for accountability within corporate structures. Critics argue that expansive indemnification could encourage a culture of irresponsibility among officers if they believe they can evade consequences for misconduct or neglect. This tension highlights ongoing debates about corporate governance practices and the extent to which protections should be afforded to those who hold fiduciary responsibilities within corporations.