Law Commons^™

Good Faith, State Of Mind, And The Outer Boundaries Of Director Liability In Corporate Law, Christopher M. Bruner

ExpressO

The Delaware General Corporation Law was amended in 1986 to permit shareholder-approved exculpatory charter provisions shielding directors from monetary liability for certain types of fiduciary duty breaches, explicitly excepting breaches of the duty of loyalty and conduct not in "good faith" – evidently distinct concepts in the Delaware legislature’s view. This paper examines the development of corporate fiduciary duty doctrine in Delaware leading up to and following this statutory amendment, focusing particularly on the Delaware courts' evolving conception of the meaning and doctrinal status of good faith. Specifically, the paper argues that Delaware's statutory exculpation regime and good faith case …