I was delighted this week to receive a courtesy copy of the newest contribution, in hardback, to corporate law scholarship by Stephen Radin as an update to his iconic four-volume treatise on the Business Judgment Rule. It features a Foreword by former Delaware Chief Justice E. Norman Veasey.

What a challenge to do a short overview on a blog of a 1,500 page deep dive into a complex bedrock tenet of corporate law, with its discussion of countless seminal decisions and more recent court opinions that address the many facets of this keystone of corporate governance. I encourage anyone interested in this area of law to include this important tool in their toolbox.

In this short blog post I only attempt to whet the appetite of those interested in this topic.  

Highlights

  • The book begins with the basics, including the role of Delaware in corporate governance and the importance of the internal affairs doctrine.
  • The book provides a primer on the business judgment rule and examines the fiduciary duties of care and loyalty, as well as the Section 102(b)(7) exculpation.
  • The treatise includes a discussion of the amendment in 2025 to Section 144 and its new and heightened business judgment rule presumption.
  • Copious citations support an analysis of the effect of the presumption, when the presumption is not rebutted, when it is irrebuttable—supplemented by examples of how to rebut the presumption.
  • True to its title, the court discusses the role of the BJR in derivative litigation, including the demand requirement: demand excused and demand refused,
  • Although cases in other states are addressed, the focus is on Delaware law and the seminal Delaware cases, as well as more recent cases that discuss the multi-faceted aspects of demand futility and the challenge to proceed with derivative litigation when demand is refused.
  • The final chapter deals with special litigation committees and restoration of board control if a stockholder satisfies the demand requirement.

In the chapter that provides a primer on the Business Judgment Rule, the author begins with the introductory statement that:

Corporate law ‘starts with the bedrock principle’—codified in Section 141(a) of the General Corporations Law—that ‘the business and affairs of any corporation . . . should be managed by or under the direction of a board of directors.’ ‘Directors, rather than shareholders, manage the business and affairs of the corporation.’ . . . This ‘bedrock statutory principle of director primacy’ is ‘the centerpiece of Delaware law’ and the ‘cornerstone of Delaware’s board-centric regime.’ (citations omitted.)

Consistent with this bedrock principle, ‘for its entire history, our corporate law has tried to insulate the good faith decisions of disinterested corporate directors from judicial second-guessing.’ ‘The Business Judgment Rule embodies that policy judgment,’ is ‘at the foundation’ and ‘at the core of Delaware corporate law’ . . . (citations omitted.)

Treatise at 25-26.

The publisher is Wolters Kluwer 1-800-638-8437.