The Definitive Guide for Director Gifts

You wouldn’t think it unless you were in this field but gifts to directors are a pain in the butt. They can raise four types of issues: (i) disclosure in proxies filed with the SEC, (ii) taxable income (iii) conflicts of interests and in extreme cases, (iv) director independence issues.

These issues can rear their heads regardless if the gifts come from outsiders like the company’s clients, service providers or other third-parties – or from people inside the company, like the CEO, any senior officer or from the company itself.

These issues can be raised even if the gift isn’t given to the director directly, but rather is directed instead to a person or institution closely associated with the director – like a family member, a school or a charity. How do you navigate this minefield?

Here are the 4 things to know about gifts to directors:

• Decide your policy approach
• Decide your tracking approach
• Use a “gift log”
• Get other departments involved

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