From Directors to Officers: How Fortune 1000 Companies Are Embracing Delaware’s New Legal Armor
Delaware amended Section 102(b)(7) of its General Corporation Law (DGCL) in 2022 to allow exculpation of certain senior officers from personal liability for monetary damages for breaches of their fiduciary duty of care (“Officer Exculpation”). Before it was amended DGCL §102(b)(7) only allowed exculpation for directors. To take advantage, Delaware companies need to include a […]
Neil McCarthy is Co-Founder and Chief Product Officer, G. Michael Weiksner is Co-Founder and Chief Technology Officer, and James Palmiter is CEO and Co-Founder at DragonGC. This post is based on a DragonGC memorandum by Mr. McCarthy, Mr. Weiksner, Mr. Palmiter, Jennifer Carberry, Natalie Richardson, and Evan Quille, and is part of the Delaware law series; links to other posts in the series are available here.
Delaware amended Section 102(b)(7) of its General Corporation Law (DGCL) in 2022 to allow exculpation of certain senior officers from personal liability for monetary damages for breaches of their fiduciary duty of care (“Officer Exculpation”). Before it was amended DGCL §102(b)(7) only allowed exculpation for directors. To take advantage, Delaware companies need to include a provision in the certificate of incorporation, which typically will require a stockholder vote to implement for companies that are already public.
Since the law changed, DragonGC has been tracking trends in adoption of Officer Exculpation by Delaware companies. In this report, we examine the adoption of Officer Exculpation to date, with an emphasis on Fortune 1000 companies.
