Limiting Directors' Duty of Care Liability: An Analysis of Delaware's Charter Amendment Approach

Authors

Craig W. Hammond, University of Michigan Law School

Abstract

This Note explores the corporate law principles guiding the amendment of section 102(b)(7) and considers what effects this statute will have on the investor-director relationship. The Note focuses on whether this reform measure excessively protects directors at the expense of shareholders.

Part I analyzes the neoclassical economic view of the contractual relationship between stockholders and management that serves as the theoretical justification of section 102(b)(7). Part II proposes a modification of the Delaware statute that would provide for periodic shareholder review of charter amendments limiting liability.

Recommended Citation

Craig W. Hammond, Limiting Directors' Duty of Care Liability: An Analysis of Delaware's Charter Amendment Approach, 20 U. Mich. J. L. Reform 543 (1987).
Available at: https://repository.law.umich.edu/mjlr/vol20/iss2/5