Fiduciary Duties in the Water

Corporate partner Doug Raymond, with support from corporate partner Amelia Brett, authored an article for Directors & Boards debating the topic as to whether directors of Delaware corporations owe fiduciary duties only to stockholders of their specific corporation or to a broader group of stakeholders.

Raymond discusses James McRitchie v. Mark Zuckerberg, et al., aimed to reaffirm the Delaware ruling that directors owe “firm-specific fiduciary duties” to their stockholders only and that these fiduciary duties require directors to seek to maximize for the benefit of those stockholders the value of the corporation they serve over the long term.

In the article, Raymond suggests “directors should consider external factors and seek to maximize the return of all investments, taking into account the effect of their decisions on society and the economy as a whole.” And the case, “serves as an important reminder that directors have a fiduciary duty to above all else — while acting within the bounds of the law — seek to maximize the value of their corporation over the long term for the ultimate benefit of their stockholders.”