Directorship has an interesting appreciation of Delaware Chancellor William Chandler by former Vice Chancellor Stephen Lamb followed by a very interesting interview of Chandler himself (HT: Pileggi). Money quotes:
- an equity judge “owns” the decision because he is personally responsible for the result, rather than a jury, for example, which is not accountable and not really personally responsible for the decision in the same way a judge in a court of equity is.
- Our fiduciary law is a floor for director conduct, essentially a standard below which they may not fall without risking liability.
- What I was hoping to say in Disney is merely that it’s highly unlikely that they would ever be found liable if directors followed a path of best practices. You could look at these best practices similar to a safe harbor provision. But best practices in any endeavor constitutes an aspirational norm rather than a requirement, which hopefully will inspire as well as guide and inform directors in their decision-making.
- We don’t allow hindsight bias to influence us by judging what they did by facts or circumstances that came to light later and then use those to judge someone based on things they didn’t know about at the time.
- I’ve talked to a lot of directors who tell me that they spend more time worrying about the influence of proxy advisors like ISS, Glass Lewis and Governance Metrics, rather than the risk of liability. They complain that a director must constantly figure out how such proxy advisory firms are ranking their company and what they’re going to say about their company.
