ANALYSIS: DGCL Officer Exculpation Changes Strike Right Balance

The Delaware General Corporation Law has long shielded corporate directors from personal liability for monetary damages arising from breaches of fiduciary duty. But corporate officers haven’t been offered the same level of protection, leading to a higher likelihood of officers being named in non-meritorious claims by stockholder plaintiffs—that is, until now.

In August, Delaware amended Section 102(b)(7) of the DGCL to extend its protections from personal liability to corporate officers, subject to certain exceptions. If a corporation implements the authorized change to its certificate of incorporation, its covered officers will be shielded from potential liability on the same basis as ...