In Gesoff v. IIC Industries, Delaware Vice Chancellor Stephen Lamb addressed the use by a subsidiary corporation of a special committee of independent directors to negotiate a proposed freezeout merger between the sub and its parent corporation. In the course of his opinion, he noted:
Members of a special committee negotiating a parent-subsidiary merger must, of course, be independent and willing to perform their job. This independence is the sina qua non of the entire negotiation process. The court necessarily places more trust in a multiple-member committee than in a committee where a single member works free of the oversight provided by at least one colleague.100 But, in those rare circumstances when a special committee is comprised of only one director, Delaware courts have required the sole member, “like Caesar’s wife, to be above reproach.”
100 Vice Chancellor Hartnett’s common sense intuition that two heads are better than one in the context of special board committees has since been bolstered, in some sense, by economic and empirical research. See, e.g., Stephen M. Bainbridge, Why a Board? Group Decisionmaking in Corporate Governance, 55 VAND. L. REV. 1, 12 (2002) (“In sum, groups appear to outperform their average member consistently, even at relatively complex tasks requiring exercise of evaluative judgment . . . . Corporate law’s strong emphasis on collective decisionmaking by the board thus seems to have a compelling efficiency rationale.”).
The cited article can be downloaded here. Also potentially of interest will be the sections in my books Corporation Law and Economics and Mergers and Acquisitions on the role of independent directors in various corporate transactions and, specifically, in freezeout mergers.