ANALYSIS: Boards Win in Delaware’s ‘Firm-Specific’ Duty Ruling

Delaware companies scored with the Delaware Chancery Court’s recent opinion in McRitchie v. Zuckerberg. The ruling clearly defined and limited Delaware’s “firm-specific” fiduciary duties of the board, effectively taking the wind out of the sails of related shareholder litigation and proposals.

Litigation on the issue of boards’ fiduciary duties has risen 83% in the state since two precedential rulings from 1985 left some questions unanswered, but McRitchie will likely put a stop to most lawsuits on the matter.

Key Delaware Case Law on Fiduciary Duties

The McRitchie ruling—and the two 1985 Delaware Chancery Court rulings cited in McRitchie—are ...