Should Courts Do Behavioral Analysis of Boardroom Conduct?
Journal of Business & Technology Law, Vol. 9, No. 1, 2014
9 Pages Posted: 12 Feb 2014
Date Written: February 11, 2014
A stunning collapse of judgment by a board of directors of able professionals in an acquisition led a Vice Chancellor of the Delaware Chancery Court to expound on "cognitive bias" in group decisions. At issue is whether modern behavioral analysis of group decision making should be part of a court’s analysis of the fiduciary duty of a board of directors. The author, after consideration, rejects a robust application of behavioral analysis in court evaluations but does support a limited role for the reasoning.
Keywords: Boards of Directors, Cognitive Bias
JEL Classification: K2, K20, K22, K29
Suggested Citation: Suggested Citation