Does Sarbox render board members personally liable?

There's little doubt that Sarbox has put added pressure on outside directors. Audit committee members seem to be the most affected, given the monitoring requirements and the fact that audit resources often report directly to them. But what about financial liability? The conventional wisdom, especially in the wake of Enron and WorldCom, is that directors could be held personally liable for malfeasance. The Conference Board, with McKinsey and KPMG's Audit Committee Institute, have released a study that argues directors could face heightened liability if they don't have the right risk processes in place. Others argue the reality is that outside directors rarely have to pay up. One study found only 13 cases since 1980 when directors paid anything out-of-pocket to settle a lawsuit. Of course Sarbox could easily change that, so it pays to be prepared.

> Here's the Forbes article.