This article first shows that, despite the possibility of including an exculpation language in a Delaware corporation's certificate of formation, there are still a variety of reasons why being informed does matter.
- The evolution of Delaware's business judgment rule from an abstention concept to a standard of review in the context of procedural due care is then explained.
- It is known that the business judgment rule operates inside a context of corporate power and responsibility and acts as an important tool for safeguarding corporate board authority throughout this article.
- The paper suggests that when attempting to determine whether or not a board was adequately informed when making a business decision, the Delaware courts adopt a mild gross negligence standard that may be uniformly applied.
- A less liberal gross negligence standard should be used in that rather well specified fact pattern, however, in consideration of the understanding that the Delaware Supreme Court's decisions in Van Gorkom and Cede do not adhere to such a mild gross negligence standard in a merger context.
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