Panel: Will Clarke, Bob Lerner, and Kathleen Murray
All corporations in the United States must have a board of directors, a fact that holds true for even the smallest of companies. The vast majority of these corporations are very small and most of those are owned by a single, or a small # of shareholders, who are actively involved in day-to-day management. And for these firms, the board of directors is usually nothing more than a legal formality- – a “paper” board. But when a company grows large enough or has realistic ambitions to do so, it must look to form a board. And the same is true whether the company happens to be a limited liability company with one or more managing members.
In either case, the first step may take the form of an advisory board. However, at least in the case of most such companies, there is an ultimate need for a real board – a fiduciary board of directors. It sounds simple but creating and properly utilizing a board has many complexities based on ownership (e.g., public vs. private companies) and other factors. However, the ultimate objective of any board must be to meet the needs of the company over which it is a steward. Structure makes all of the difference in achieving this objective.
This episode of Bare Bone Board Basics compares and contrasts (1) advisory boards, (2) fiduciary boards of private corporations, (3) fiduciary boards of public corporations, and (4) managing members of limited liability companies.
As with each episode in this series, the information presented in this webinar will be equally helpful and accessible to company owners/leadership as to board members and prospective board members.
Case Law Referenced:
- In re HHH Choices Health Plan, LLC, 554 B.R. 697, 704 (Bankr. S.D.N.Y. 2016)
- North American Catholic Educational Programming Foundation Inc. v. Gheewalla, 2007 Del. LEXIS 277 (Del. Supr. May 18, 2007)
- Bridgeport Holdings Inc. Liquidating Trust v. Boyer (In re Bridgeport Holdings, Inc.), 2008 WL 2235330 (Bankr. D. Del. May 30, 2008)
- Smith v. Van Gorkom, 488 A.2d 858 (Del. 1985)
- In re Caremark Int’l Inc. Deriv. Litig., 698 A.2d 959, 970 (Del. Ch. 1996)
- In re Walt Disney Co. Derivative Litigation, 2005 WL 1875804 (Del. Ch. 2005)
- In re Emerging Communications, Inc. Shareholder Litigation, 2004 WL 1305745 (Del.Ch. 2004)
- In re Cadira Group Holdings, LLC Litigation, 2021 WL 2912479 (Del.Ch. July 12, 2021)
- Largo Legacy Group, LLC v. Evens Charles, C.A. No. 2020-0105-MTZ (Del. Ch. June 30, 2021)
- MedCision LLC v. Ehrhardt et al., case number 3:19-ap-03059
- Frederic Hsu Living Trust. V. ODN Holding Corp