Recent high-profile clawbacks of executive pay highlight how company policies may need to evolve, both in terms of what pay is subject to clawback and whether a clawback should apply in circumstances where no financial restatement is required. Boards should use this event as a reason to re-evaluate clawback policies and as a lesson that being proactive in the use a clawback policy before a financial crisis is made public can be beneficial in managing the public perception of the incident and the board’s performance. In a recent noteworthy clawback, two top executives at Wells Fargo will forfeit unvested equity awards pending an investigation by the board into potential wrongdoing. In that situation, a provision in the Wells Fargo policy calls for the clawback of performance-based awards in circumstances where an executive has caused significant harm to the company’s reputation and not just in the event of a financial restatement. Such a provision goes well beyond what is currently required under existing or proposed SEC rules. Boards should review their company clawback policies to ensure that they will be effective under various scenarios. Read our prior discussion of Clawback Provisions in the Spotlight and the SEC’s Proposed Rules for Executive Pay Clawback Policies. Read about limitations on the effectiveness of clawback policies in the New York Times and more about the Wells Fargo clawback in this Fortune article.