News & Analysis as of

Corporate Governance Business Judgment Rule Board of Directors

Jenner & Block

Delaware Supreme Court Clarifies MFW Framework

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On April 4, 2024, the Delaware Supreme Court held in In re Match Group Inc., Derivative Litigation that the entire fairness standard of review applies to all controlling stockholder transactions in which a controller receives...more

Skadden, Arps, Slate, Meagher & Flom LLP

Insights: The Delaware Edition - June 2024

In this issue, we discuss Delaware court developments, including the first-ever dismissal of a SPAC disclosure complaint, as well as rulings pertaining to financial advisor conflict and disclosure law, state laws involving...more

Skadden, Arps, Slate, Meagher & Flom LLP

Under Control: Recent Delaware Decisions on Controller Transactions, Standards of Review and Disclosure Obligations

The first half of 2024 has been a watershed moment for the development of controller law in the Delaware courts. Among the highlights, the Delaware Supreme Court reexamined and confirmed that transactions involving a...more

Cooley LLP

Delaware Supreme Court applies MFW framework to other conflicted transactions

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In In re Match Group, Inc. Derivative Litigation, the Delaware Supreme Court answered some important questions about the standard of review applicable to conflicted transactions under Delaware law. The first question relates...more

Venable LLP

Fiduciary Liability Limitations Under Nevada Law Trigger Entire Fairness Review of Conversion from Delaware Due to Controlling...

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The Delaware Court of Chancery, in Palkon v. Maffei, et al., C.A. No. 2023-0449-JTL (Del. Ch. Feb. 20, 2024), determined that a reduction in the liability exposure of a fiduciary due to the conversion of a Delaware...more

Cooley LLP

Disney decision to speak out on issue of social significance within board’s business judgment

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Boards and their advisors seeking to navigate the culture wars and their often conflicting pressures from a variety of stakeholders and outside groups may find some comfort and guidance in this recent decision from the...more

Goodwin

McDonald’s Part Two: Delaware Court of Chancery Dismisses Caremark Claims Against Directors Arising From Sexual Harassment Issues

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On March 1, 2023, in In re McDonald’s Corporation Stockholder Derivative Litigation, Vice Chancellor Travis Laster of Delaware’s Court of Chancery granted a motion to dismiss derivative claims against McDonald’s directors...more

DarrowEverett LLP

Life May Not Be Fair, But Interested Party Transactions Should Be

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When a court reviews contested business transactions of a Delaware corporation, they typically rely on one of two standards of review: the “business judgment rule” or the “entire fairness standard.” The business judgment rule...more

Hogan Lovells

In re Tesla: fair price may ameliorate procedural defects under entire fairness review - Corporate / M&A Decisions update series

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Tesla Motors Stockholder Litigation arises out of Tesla’s acquisition of SolarCity, a market leader in manufacturing and installing solar energy generation systems. On two occasions in 2015 and 2016, Elon Musk suggested to...more

BCLP

Delaware Chancery Court Decision Highlights Risks of Liability for Directors in SPAC Deals

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A recent Delaware Chancery Court decision highlights the liability risks faced by directors and sponsors of special purpose acquisition companies (“SPACs”) and the importance of robust disclosure in protecting against those...more

Hogan Lovells

Rosenbaum v. CytoDyn: Noncompliance with advance notice bylaw can block shareholders’ board nominees - Quarterly Corporate / M&A...

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In Rosenbaum v. CytoDyn Inc., C.A. No. 2021-0728-JRS (Del. Ch. Oct. 13, 2021), the Delaware Court of Chancery declined to apply the Blasius enhanced scrutiny standard to an incumbent board’s rejection of shareholders’...more

Freeman Law

Fiduciary Duties of the Board of Directors in Texas

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A corporation operates through its board of directors. All corporate powers must be exercised by or under the direction of the board. In Texas, the Texas Business Organizations Code (TBOC) provides certain provisions...more

Womble Bond Dickinson

The Business Judgment Rule Cannot Preclude Statutory Inspection Rights

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Where a corporation’s board of directors decided to take a particular course of action that was unpopular with a shareholder, the board could not invoke the business judgment rule to prevent the shareholder’s statutory right...more

White & Case LLP

AI in the boardroom: opportunities and challenges

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Artificial intelligence (AI) is increasingly transforming business processes and strategies across industry sectors. Companies are figuring out how to take advantage of AI, focusing primarily on customers' needs and...more

Skadden, Arps, Slate, Meagher & Flom LLP

A Brief Response Regarding Stakeholder Governance

The recently published “The Friedman Essay and the True Purpose of the Business Corporation” defends a view of stakeholder governance that reflects the following two basic flaws...more

Skadden, Arps, Slate, Meagher & Flom LLP

Stockholders Versus Stakeholders — Cutting the Gordian Knot

Directors of most for-profit U.S. corporations have long considered the corporation’s relationships with customers, employees, suppliers and the communities in which they operate — sometimes referred to as “stakeholders” — in...more

Sheppard Mullin Richter & Hampton LLP

COVID-19 Directors’ Duties of Oversight: Reporting and Monitoring

Boards of directors have a duty to exercise oversight and to monitor the company’s operational viability, legal compliance and financial performance during this COVID-19 pandemic. In Marchand v. Barnhill, the Delaware Supreme...more

Opportune LLP

A Closer Look At The ‘G’ in ESG: What Boards Need To Know When Examining Conflict Transactions

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In recent years, the focus on Environmental, Social and Governance (ESG) issues by investors and stakeholders has become more and more important. In the energy industry, when we think of ESG, we tend to focus mainly on the...more

Ward and Smith, P.A.

The Business Judgment Rule: How Corporate Directors Can Sleep Better At Night

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What is the Business Judgment Rule? The North Carolina Business Corporation Act (the "Act") imposes certain requirements on corporate directors to ensure that they act in the best interest of the corporation when making...more

Dorsey & Whitney LLP

The Importance of Full Disclosure

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Directors and officers of corporations owe a duty of care and a duty of loyalty to both the corporation and its shareholders, although the duty of care for directors can be exculpated. A breach of these fiduciary duties can...more

Latham & Watkins LLP

Warum die aktuelle Siemens-Diskussion auch für andere Unternehmen relevant ist

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Es wird viel über die Entscheidung von Siemens diskutiert, vertragsgemäß Signaltechnik für eine Zugstrecke zu liefern, die das australische Carmichael-Bergwerk mit dem Meer verbindet. Warum ist das Interesse hier so groß?...more

Snell & Wilmer

Director Compensation Update

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The following is an update to an important Delaware case relating to the applicable standard of review for challenged actions involving the setting of director compensation. ...more

Snell & Wilmer

Director Compensation Update

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I’ve written a number of articles and blogs about some sticky issues that can surface in the context of setting pay for public company non-employee directors... On March 6th the parties to the In re Investors Bancorp, Inc....more

Skadden, Arps, Slate, Meagher & Flom LLP

Social Responsibility and Enlightened Shareholder Primacy: Views From the Courtroom and Boardroom

There is an ongoing debate about the role that publicly traded for-profit business corporations should play in addressing a broad range of problems confronting our world today. Many issues fall under the ESG label — meaning...more

Skadden, Arps, Slate, Meagher & Flom LLP

SEC Reporting & Compliance and Corporate Governance Series

On February 13, 2018, Skadden hosted a webinar titled “ SEC Reporting & Compliance and Corporate Governance Series: Key Trends in Executive Compensation, Employment Law and Compensation Committee Practices.” Executive...more

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