Prof. Gordon Smith comments on the matter that has been prominently written about in The Wall Street Journal all this week: the imbroglio in the boardroom at HP as a result of an investigation into a leak of information and the use of pretexting by private investigators hired by the board chairwoman to get personal phone records of directors. Pretexting is impersonating another person to obtain private information about them without their authority. Sounds like old fashioned deceit and lying to me, and is expressly criminalized in many states. Of course there is a need for appropriate confidentiality in board meetings, but in my view there is a limit to what should or can be kept confidential. I am thinking of Section 220 of the DGCL which gives shareholders the right to certain key information about a company, including in some instances board related data. I realize that once data is obtained under Section 220, it is often kept from the public at large and that the leaked board-related details at HP are alleged to have been made public, but I am not aware of anything in the nature of trade secrets being published in the papers. Here is the link to the good professor’s take on the matter: Conglomerate Blog: Business, Law, Economics & Society

UPDATE: Prof. Bainbridge comments on other Delaware law aspects of the matter and the inability of the board to eject a director (a power given to shareholders) but they may demote a director  from chairperson. Here is the link: