If corporate boards were granted a New Year’s prayer for 2009, there is no doubt what it would be: “May God preserve the business judgment rule!”
That doctrine has long served as a reliable bulwark against legal challenge from angry shareholders. But your directors may want to muster extra fervor for the plea this year, because the recession is spawning legions of investor lawsuits charging board mismanagement of oversight. Meanwhile, the cream of Delaware’s judiciary in December told institutional investors meeting in Wilmington that courts may now interpret the rule—in hot-button areas such as executive pay—by taking into account special ...