These days the business pages are crammed with news of companies that have gotten into trouble. Whether it's allegations of Foreign Corrupt Practices Act violations or involvement in insider trading, there's no shortage in claims of corporate malfeasance—substantiated or not. Directors, especially those who serve public companies, recognize their resulting exposure to reputational damage and financial loss. While concerned, most take comfort in their ability to carry out the required duties of loyalty and care. They act in good faith and rely on the well-established business judgment rule.
The Delaware Chancery court also offers reasonable comfort. Chancellor William Chandler and ...