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