I. The Current State of Play -
The subjects falling within the purview of U.S. public company board of director oversight have grown to encompass virtually any subject that an investor, stakeholder or other party raises...more
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
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
8/7/2020
/ Board of Directors ,
Business Judgment Rule ,
Coronavirus/COVID-19 ,
Corporate Governance ,
Directors ,
Environmental Social & Governance (ESG) ,
Fiduciary Duty ,
Human Rights ,
Oversight Duties ,
Shareholders ,
Stakeholder Engagement
Recently a definition of corporate purpose has been proposed and elaborated on in a memorandum captioned “On the Purpose of the Corporation” (the Corporate Purpose Memo)....more
Although different in some important respects and rapidly evolving, the global pandemic shares many of the characteristics of other broadscale crisis situations that prior boards of directors have confronted and managed...more
3/24/2020
/ Board of Directors ,
Coronavirus/COVID-19 ,
Corporate Governance ,
Customers ,
Cybersecurity ,
Employer Responsibilities ,
Financial Distress ,
Risk Assessment ,
Risk Management ,
Shareholders ,
Sick Employees ,
Supply Chain
The dawn of a new decade brings with it the certainty of ongoing challenges to the conduct of public company directors based on alleged breaches of fiduciary duty.
This note is a brief reminder for directors of Delaware...more
There is an ongoing debate regarding the role of publicly traded for-profit business corporations in addressing the many serious challenges confronting society, including some directly involving nonshareholder corporate...more
On June 18, 2019, in Marchand v. Barnhill, the Delaware Supreme Court, in an opinion written by Chief Justice Leo E. Strine, Jr. on behalf of a unanimous court, issued a decision reversing the Court of Chancery’s dismissal of...more
6/21/2019
/ Board of Directors ,
Breach of Duty ,
DE Supreme Court ,
Derivative Suit ,
Dismissals ,
Duty of Care ,
Duty of Loyalty ,
Fiduciary Duty ,
Food Manufacturers ,
Good Faith ,
Independent Director ,
Listeria ,
Oversight Duties ,
Pre-Suit Notice ,
Product Recalls ,
Reversal ,
Shareholder Litigation
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
On December 7, 2018, the Delaware Supreme Court affirmed the Court of Chancery's decision in Akorn, Inc. v. Fresenius Kabi AG , C.A. No. 2018-0300-JTL, which upheld, for the first time under Delaware law, the ability of a...more
12/22/2018
/ Acquisitions ,
Best Efforts Clauses ,
Breach of Contract ,
Buyers ,
Contract Negotiations ,
Contract Termination ,
Contract Terms ,
DE Supreme Court ,
Hell or High Water Clauses ,
Material Adverse Effects ,
Merger Agreements ,
Mergers ,
Reaffirmation ,
Remedies ,
Representations and Warranties ,
Sellers
Akorn Found -
In Vice Chancellor J. Travis Laster’s recent opinion in Akorn, Inc. v. Fresenius Kabi AG, he discusses (on pages 212-216) the general subject of “efforts” clauses in contracts governed by Delaware law. The...more
11/2/2018
/ Acquisitions ,
Appeals ,
Burden of Proof ,
Commercially Reasonable Efforts ,
Contract Terms ,
Delaware General Corporation Law ,
Merger Agreements ,
Mergers ,
Reasonable Efforts Clauses ,
Standard of Proof ,
Standard of Review
As previously reported, on May 8, 2014, the Delaware Supreme Court issued an opinion in ATP Tour, Inc. v. Deutscher Tennis Bund (German Tennis Federation), No. 534,2013 (Del. May 8, 2014), holding that fee-shifting provisions...more
6/20/2014
On May 8, 2014, the Delaware Supreme Court issued an opinion in ATP Tour, Inc. v. Deutscher Tennis Bund (German Tennis Federation), No. 534, 2013 (Del. May 8, 2014), holding that fee-shifting provisions in a Delaware...more
An Issue Needing Attention -
In its recent decision in In Re Rural Metro Corporation Stockholders Litigation, the Delaware Court of Chancery, in a footnote, touches on what it means for directors to be “fully...more
This memorandum identifies and discusses a number of steps public companies may wish to consider regarding director nomination requirements and conduct in light of the heightened potential for arrival on the board of activist...more