Court Opinion

ID: 9761966
Source: CourtListenerOpinion
Date Created: 2023-08-29 02:03:19.403696+00
Date Added: 2024-06-11T07:29:28.408878
License: Public Domain

WINFREE, Justice,
concurring.
I write separately only to emphasize that AS 10.06.450(b) sets out the standard of care for corporate directors and nothing more:
A director shall perform the duties of a director, including duties as a member of a committee of the board on which the director may serve, in good faith, in a manner the director reasonably believes to be in the best interests of the corporation, and with the care, including reasonable inquiry, that an ordinarily prudent person in a like position would use under similar cireumstances.[1]
The common law business judgment rule has not been codified in or otherwise affected by AS 10.06.450(b). But the common law business judgment rule may only be applied in favor of directors meeting the standard of care set out in AS 10.06.450(b). Professor Melvin A. Eisenberg has provided a meaningful contrast between the duty of care and the business judgment rule: the duty of care is a framework for reviewing the reasonableness of the corporate decision-making process, while the business judgment rule is a framework for reviewing the quality of a corporate decision.2 Here Henrichs did not meet the standard of care for his decision-making process, and he is therefore not entitled to business judgment rule protection for the quality of his decisions.

1. AS 10.06.450(b).

. E.g., Melvin A. Eisenberg, The Divergence of Standards of Conduct and Standards of Review in Corporate Law, 62 L.Rev. 437, 439-40, 447 (1993); Melvin A. Eisenberg, The Duty of Care of Corporate Directors and Officers, 51 U. Pitt. L. Rev. 945, 948, 959 (1990).