Exploring the Foundations of Delaware’s Business Judgment Rule

• David Kershaw (LSE)
• Chaired by Martin Petrin (UCL Laws)

About the talk

Today US and UK fiduciary law provide very different approaches to regulating the behaviour and liability of corporate directors. However, the law in both jurisdictions borrowed from the same sources in early English fiduciary and commercial law. The talk will identify the shared legal foundations and authorities and explore the drivers of corporate fiduciary law’s contemporary divergence, challenging the prevailing accounts of US and UK legal change and stability. In doing so, the talk will focus specifically on the state of Delaware’s business judgment rule, which provides that if directors comply with both their duty of care in the process of making a decision and their duty of loyalty then the decision will only be subject to rationality review. It will contrast Delaware’s approach with the framework in the United Kingdom, which provides a more intrusive system of judicial review. Despite these differences, however, the talk will demonstrate how both jurisdictions’ contemporary regulation of business judgment should be seen as the product of the same eighteenth- and early nineteenth-century common law approach to the exercise of delegated power.

About the speaker

David Kershaw is a Professor of Law at the London School of Economics and is the General Editor of the Modern Law Review. Prior to joining the LSE he was a Lecturer in Law at the University of Warwick between 2003-2006. Prior to his academic career he qualified as a Solicitor at Herbert Smith, London and practised corporate law in the Mergers & Acquisitions Group of Shearman & Sterling in New York and London. He holds a LLM and a SJD from Harvard Law School and a LLB from the University of Warwick. He has published widely in the fields of corporate law, takeover law and accounting regulation. His most recent books are, The Principles of Takeover Regulation (OUP: 2016) and The Foundations of Anglo-American Corporate Fiduciary Law (CUP: 2018).
 

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