Directors addressing new political uncertainties, a host of heightened challenges and asserted “best practices” from many sources may understandably ask whether their fiduciary duties have changed as well. This paper synthesizes the latest decisions of the Delaware courts on the standards of conduct for directors and the standards by which their conduct is reviewed. While directors should expect uncertainty to be a fact of corporate life for the foreseeable future, this paper emphasizes that neither the fiduciary duties of directors nor the protections afforded them have changed. Disinterested and independent directors acting in good faith continue to have broad protections under the business judgment rule. The legal framework thus enables and, indeed, encourages directors to act proactively and make hard choices when they need to do so.
In an accompanying article, former Delaware Chief Justice E. Norman Veasey and Ira M. Millstein elaborate upon how directors, under existing law, are both empowered and have the freedom to make decisions they deem in the best interests of the corporation. The article urges directors, in reliance on this framework, to have the courage to work towards securing the long-term future of their corporations.
Ellen J. Odoner, Stephen A. Radin, Lyuba A. Goltser & Andrew E. Blumberg,
Fiduciary Duties of Corporate Directors in Uncertain Times,
Available at: https://scholarship.law.columbia.edu/global_markets_corporate_ownership/17