Publications

Director Independence Issues to Consider When Taking a Portfolio Company Public

Summer 2006
Private Equity Developments - Summer 2006

Portfolio companies of a private equity firm whose equity securities are registered and publicly listed on a national securities exchange must comply with the director independence requirements pursuant to the Sarbanes-Oxley Act as well as with the rules and regulations promulgated by the Securities and Exchange Commission (“Act Rules”) relating to director independence. These compliance obligations commence upon the effectiveness of such company’s registration statement under the Securities Act of 1933. In addition, a listed company must comply with the director independence standards set forth in the corporate governance guidelines of applicable securities exchange on which the securities are listed “Listing Standards”). It is therefore important for a private equity to take steps to comply with the director independence requirements early in the process of taking a portfolio company public.