Fiduciary Duties of Corporate Directors in Uncertain Times

8 Pages Posted: 10 May 2018

See all articles by Ira M. Millstein

Ira M. Millstein

Weil Gotshal & Manges LLP

Ellen Odoner

Weil Gotshal & Manges LLP

Aabha Sharma

Weil Gotshal & Manges LLP

Date Written: Winter 2018

Abstract

Confronting new political uncertainties, heightened challenges, and asserted “best practices,” directors may wonder whether their fiduciary duties have changed. The authors synthesize 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, neither the fiduciary duties of directors nor the protections afforded them have changed. Disinterested and independent directors, acting in good faith to make decisions they deem in the best interests of the corporation, continue to have broad protections under the business judgment rule. This legal framework enables and encourages active directors to make hard choices when they need to do so. The paper includes flowcharts illustrating how the standards of judicial review apply to various categories of business decisions that directors may have to make. It concludes with practical suggestions for directors and General Counsels to establish business judgment rule protection for board decisions or, where applicable, withstand more stringent standards of review.

Suggested Citation

Millstein, Ira M. and Odoner, Ellen and Sharma, Aabha, Fiduciary Duties of Corporate Directors in Uncertain Times (Winter 2018). Journal of Applied Corporate Finance, Vol. 30, Issue 1, pp. 17-22, 2018, Available at SSRN: https://ssrn.com/abstract=3176245 or http://dx.doi.org/10.1111/jacf.12273

Ira M. Millstein (Contact Author)

Weil Gotshal & Manges LLP ( email )

767 Fifth Avenue
New York, NY 10153
United States
212-310-8100 (Phone)

Ellen Odoner

Weil Gotshal & Manges LLP ( email )

767 Fifth Avenue
New York, NY 10153
United States

Aabha Sharma

Weil Gotshal & Manges LLP ( email )

767 Fifth Avenue
New York, NY 10153
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
4
Abstract Views
486
PlumX Metrics