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All in Corporate Governance
Recent decisions in the Delaware Court of Chancery confirm that investors exercising blocking rights may be held liable for breach of fiduciary duties. Startups and venture capitalists alike should be careful not to prevent access to capital in times of need.
Recent cases in the Delaware Court of Chancery have permitted personal liability claims against directors who fail to monitor warning signs within businesses. To protect against liability, boards should implement clear, thoughtful procedures that alert them to issues within their organizations.
The SEC recently issued guidance for conducting shareholder meetings in light of Covid-19, while California and Delaware have relaxed restrictions for virtual meetings as people around the country are being told to stay home to fight the spread of the virus.
