Compromised Independent Directors.

Boardroom Governance Newsletter #32 | Sept 13, 2022.

“Scholars have confirmed the intuitive reality that directorships are valuable and sought after. Delaware law has long recognized that a director may be compromised by sense of gratitude for past benefits. Recent scholarship demonstrates that directors may be compromised by the promise of future rewards. The receipt of past directorships and access to a steady flow of future opportunities can be a strong motivator. Although a director’s nomination to a board standing alone is not enough to call into question the director’s independence from the nominating party, a pattern of facts surrounding the director’s service can do the trick.” Delaware Vice Chancellor Laster’s opinion in Goldstein v. Denner (May 2022)

In Goldstein v. Denner, Delaware Vice Chancellor Travis J. Laster addressed once again the question of director independence.

The case involves biotech company Bioverativ, which started life as a business unit inside Biogen, a biotech and pharmaceutical company. After a proxy figh…