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In September 2021, the Boeing 737 Max debacle turned into a pivotal moment in corporate law. A Delaware court allowed a derivative lawsuit brought by Boeing shareholders to proceed based on the theory that Boeing's directors breached their oversight duties by not doing enough to monitor, prevent, and react to fatal airplane safety issues. This Article explains what the Boeing decision means for director oversight duties going forward and uses it as a springboard to discuss broader trends in corporate law. Specifically, the Article makes the following five contributions. First, the Article delineates the contours of a new era of heightened oversight duties. Corporate law courts are increasingly willing to designate certain compliance risks as "mission critical," thereby activating a heightened scrutiny mode. Boeing suggests that practically all directors of manufacturing companies are operating in or around the mission-critical zone these days, and illustrates just how enhanced the scrutiny is once in this zone. Second, the Article fleshes out a shift in focus: from scrutinizing compliance with regulations meant to protect investors (such as financial reporting), to scrutinizing compliance with regulations meant to protect broader societal interests (such as product safety). Boeing, for example, faults directors for focusing on restoring corporate profitability and image instead of putting consumer safety front and center. Third, the Article uses Boeing to show how corporate law guides behavior not just directly, through legal sanctions, but also (and indeed more so) indirectly, through shaping norms and reputations in the business community. Boeing did not end in a verdict in favor of the plaintiffs: it was instead settled quickly after the motion to dismiss. Still, the case created significant changes in the advice that lawyers give their director clients and in the volume and tone of media coverage, which in turn created reputational fallouts. Fourth, the Article evaluates the desirability of the Boeing development. On the one hand, the development holds the promise of mitigating incentives to remain ignorant, thereby improving accountability. On the other hand, Boeing may have gone too far in removing corporate law's guards against hindsight bias. Finally, the Article spotlights two big questions Boeing left unanswered: officer oversight liability and director liability for oversight of nonlegal requirements. [ABSTRACT FROM AUTHOR]

The article examines the laws related to elections for corporate directorships in the U.S. Topics discussed include the U.S. Supreme Court's decision in the case Buckley v. Valeo; laws defined by Securities and Exchange Commission (SEC) for insurgent campaigns: and laws concerning financing of corporate elections.

The article examine Social Network Analysis (SNA) in order to determine the legality of interlocking directorates under section 8 of the Clayton Act in the U.S. Topics discussed include Seventh Circuit's decision in the case 'Robert F. Booth Trust v. Crowley,' need of change the standard of interlocking directorates; and the need of change in the laws to reduce the costs of anticompetitive interlocks.

Provides a look at the imposition of liability on corporate directors. The two purposes of imposing liability on directors; Liability to creditors in cases of corporate insolvency; Considerations for confining the right of action to the corporation.

Traces the impact of the widespread adoption of interested-director statutes on the rules governing action by the corporation's board of directors in the United States. Disqualification of interested directors; Requirements for disinterested-director approval; Tensions between the requirements for board action and the role of disinterested directors.

Discusses the indemnification of directors in actions brought directly by the corporation. Development of indemnification rights; Protection of directors from direct suits; Outline of public policy limitations on indemnification; Discussion on how corporations can avoid an unintentional obligation to finance the defense of directors.

Analyzes the issues relating to personal liability exposure for duty of care violations faced by the director of a financial institution. Directors' ordinary standard of care; State exculpatory legislation; Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA); Federal courts' interpretation of section 1821(k); National standard of gross negligence.

Spurred by recent judicial decisions and by a crisis in the director and officer liability industry, the "race to the bottom" once again is being run. At stake are the security Of corporate boardroom personnel in knowing that each business decision they make will not expose them to multimillion-dollar liability, the ability of shareholders to monitor the corporation, and the power of shareholders to protect their rights or those of the corporation. In the 1985 case of Smith v. Van Gorkom, the Delaware Supreme Court shocked corporate America by holding that the business judgment rule does not protect directors from liability for gross negligence. An unfortunate yet understandable consequence of the ruling is that it deters directors from serving on corporate boards out of fear that their personal assets would be at risk each time they made a business decision. In 1986, Delaware responded to the Van Gorkom decision and the subsequent fears of directors. The Delaware General Assembly amended the corporate code to allow a corporation to amend its certificate of incorporation to limit or eliminate directors' liability for breach of the fiduciary duty of care, and to expand the rights of directors or officers to indemnification. To date, many states have enacted similar legislation.` Several of those states have enacted statutes that offer more protection than the Delaware statute. This Article will examine director liability statutes, including the "race to the bottom" theory of state corporation law, the Van Gorkom decision and its effect on the business judgment rule, and the states' legislative responses to these developments. Further, this Article will compare the Delaware legislation to similar legislation of other states, and will examine the policy considerations resulting from the decisions of the different legislatures. [ABSTRACT FROM AUTHOR]

The shareholder derivative action is generally regarded as a useful and necessary device by which shareholders of corporations may deter and remedy abuses of corporate power. Nevertheless, the derivative action has been viewed by many with suspicion. This suspicion has manifested itself in a number of restrictions which hinder the ability of shareholders to bring derivative actions. Among the restrictions are the demand rule and the business judgment rule. The demand rule requires shareholders to seek redress or action from the board of directors prior to commencing a derivative action. The business judgment rule adds a degree of finality to the decision of the board of directors on whether to commence legal action against alleged corporate wrongdoers by blocking derivative suits absent allegations that the board of directors failed or were unable to exercise sound business judgments. The finality of the director's decision has been strengthened by recent decisions which enable a "special litigation committee" to exercise the veto power otherwise vested in the board of directors. The litigation committee may consist of even a minority of the total board and may consist of outside consultants. The primary substantive restraint on the committee is that it be able to act in a detached and disinterested manner. First, this article will suggest that the restrictions on the shareholder derivative suit, particularly the nearly absolute power of the board of directors to block such suits, are largely unnecessary and confusing. Second, it will be demonstrated that the board of directors can easily abuse its power under current doctrines. Last, this article will suggest alternatives which may be more effective and desirable. This article will concentrate on shareholder derivative actions in federal courts. The discussion will focus on derivative claims against corporate insiders; suits involving third parties are beyond the scope of this article. In addition, the... [ABSTRACT FROM AUTHOR]

Describes the revised Virginia Stock Corporation Act of 1987. Reduction of the duty of care of directors; Personal liability cap rules.