Patriot Scientific

……….As a general matter, a diligent director who tends to his responsibilities is unlikely to find himself in the same position as the three DHB directors. However, there are four key lessons from the DHB complaint that all outside directors should remember

1. Conflicts of interest can undermine a director's actual or perceived independence.

2. Outside directors must respond, without exception, to red flags.

3. Any investigations by outside directors must be independent.

4. Outside directors must not disregard any information, even if they do not value the source.

http://www.mondaq.com/unitedstates/x/133890/Securities/SEC+Enforcement+Spotlighting+Outside+Directors