Relationships between directors and senior management under stock exchange independence standards

A disclosure in March 2010 by Black & Decker Corp and a subsequent clarification as a result of a complaint by the New York Stock Exchange (NYSE) provide helpful insight regarding how business, and possibly other, relationships between directors and senior management, may impair a director's independence both for exchange listing standards and other contexts, and may give rise to unwanted publicity. Item 407 of Regulation S-K requires a listed company to disclose for each director or nominee for director by specific category or type, any transactions, relationships or arrangements that were considered by the board of directors under the applicable independence definitions in determining that the director is independent. In the special litigation committee context, a 2003 decision by the Delaware Court of Chancery, In re Oracle Corp Derivative Litigation, made clear that a director's independence could be compromised by social factors.