The duty concerns the decision process rather than the outcome, requiring reasonable information gathering and deliberation. Gross negligence is the liability standard in most formulations.
Exculpatory charter provisions may eliminate monetary liability.
Alternative Names:
Duty of Care (Fiduciary)|Care Duty
Why it Matters?
Exculpation provisions under Delaware section 102(b)(7) and state analogs eliminate monetary damages for care breaches, which is why plaintiffs pleading against directors must reach loyalty or bad faith to survive. That reality shapes how derivative complaints are framed. The process focus also means documenting board deliberation, materials reviewed, and advisor input creates the record that defeats a care claim regardless of how the decision turned out.
Frequently Confused with
Related terms
Frequently asked questions
Why do plaintiffs avoid pleading care claims?
What defeats a care claim?
