Tag: dual-class structures

Will dual-class structures torpedo the business judgment rule?

While there has certainly been a lot of debate about the merits and demerits of dual-class stock, one interesting angle was raised by Charles Elson, director of the University of Delaware’s John L. Weinberg Center for Corporate Governance Delaware Law. In an interview reported in Bloomberg BNA, Elson predicts that expanded use of dual-class corporate structures will lead the Delaware courts to reconsider the business judgment rule.  For companies with no- or low-vote classes of shares, is the business judgment rule in jeopardy?