Opinion ID: 754147
Heading Depth: 3
Heading Rank: 1

Heading: The Board's Authority to Amend the Plan and Delegate Plan Matters

Text: 20 Because it is tacitly conceded that the board possessed the authority to amend the Plan, see 8 Del.Code Ann. § 141(a), but never actually undertook such an amendment, we pause to address the plaintiffs' argument that only the board of directors had authority to adopt amendments to the Plan in this case. The answer must be that unless otherwise provided by the certificate of corporation and subject to the limitations set forth in 8 Del.Code Ann. § 141(c), the board may freely delegate the authority to manage the business and affairs of the corporation. See 1 R. Franklin Balotti & Jesse A. Finkelstein, The Delaware Law of Corporations & Business Organizations § 4.17, at 32 (collecting cases). Indeed, the ability to delegate is the essence of corporate management, as the law does not expect the board to fully immerse itself in the daily complexities of corporate operation. See Grimes v. Donald, 673 A.2d 1207, 1215 (Del.1996) (The board retains the ultimate freedom to direct the strategy and affairs of the Company.); Cahall v. Lofland, 114 A. 224, 229 (Del.Ch.1921) (The duties of directors are administrative, and relate to supervision, direction and control, the details of the business being delegated to inferior officers, agents and employees. This is what is meant by management.); 1 Balotti & Finkelstein, supra, § 4.17. The record does not suggest that the board's delegation of the administration or amendment of the Plan would violate CW's certificate of corporation or the specific prohibitions embodied in section 141(c) of the Delaware code. 21 Nor do we agree with the plaintiffs' assertion that the delegation of Plan matters, including its amendment, to a corporate officer or agent would necessarily constitute an abdication of managerial duties. The business decision of appointing a corporate officer to manage retirement health benefits for the corporation does not have the effect of removing from directors in a very substantial way their duty to use their own best judgment on management matters. Abercrombie v. Davies, 123 A.2d 893, 899 (Del.Ch.1956), rev'd on other grounds, 36 Del.Ch. 371, 130 A.2d 338 (1957). Moreover, nothing in the record demonstrates that a delegation of authority in this context would formally preclude the ... board from exercising its statutory powers and fulfilling its fiduciary duty. Grimes, 673 A.2d at 1214 (citation omitted). The board's 1976 resolution with respect to the Plan's self-insurance illustrates this conclusion. Therefore, contrary to the plaintiffs' contentions, the board could freely delegate its authority to administer and amend CW's retirement benefits plan appropriately. 22