Executive risks from the year 2000 software date problem

Abstract

The year 2000 date problem may become the most significant legal problem in history in terms of the numbers of law suits that might be filed. The number of personal law suits aimed at corporate executives for violation of fiduciary duty has at least the potential of affecting the executives and boards of directors of more companies than any other single issue: possibly more than 50 percent of top corporate executives and officers are at some risk. At a lower level, lawsuits for professional malpractice might be aimed at a number of corporate knowledge workers such as risk managers, corporate attorneys, controllers, and auditors may also set new records in terms of the numbers of law suits filed. Discusses the probabilities that the year 2000 damages will be serious enough to trigger personal lawsuits against corporate officers. Current data indicates a 55 percent probability of law suits for executives who fail to take action against the year 2000 problem. However, there is a 5 percent probability of litigation against executives who do take year 2000 action. Overall, taking action to achieve year 2000 compliance is the safest course.