Kristen S. Swift
This Note makes several points, drawn from Delaware litigation history, on the futility of pleading corporate waste in Delaware. At inception, the waste doctrine was a tool for shareholder protection and empowerment; however, as calculated business risk became encouraged and later formally protected by the business judgment rule, the waste doctrine evolved to protect officers and boards and now sets a nearly impossible benchmark for misconduct that would allow shareholders to recover on a waste claim. The waste doctrine is inextricably tied to how business risk-taking is perceived by Delaware courts and shifting attitudes toward risk in business decision-making have transformed the doctrine into a mere specter of its former self, rendering it extinct.
Last, this Note addresses the post-financial crisis search for corporate accountability and recent attempts at revitalizing the waste doctrine as a means to this end. This Note illustrates how and why the waste doctrine fails as a means for curbing excessive executive compensation and as a means for ensuring corporate accountability in the face of alleged wrongdoing.
- corporate waste,
- executive compensation,
- Court of Chancery,
- Fiduciary Duties,
Available at: http://works.bepress.com/kris_swift/1/