# kaal:claim:1558614-025

**Claim.** The U.S. requirement that directors act on an informed basis is watered down because many states permit charter provisions exculpating directors from liability for breach of the duty of care, including the duty to act on an informed basis.

**Type.** failure  **Support.** evidenced

**Holds when.**

- states with exculpation statutes such as Delaware, Illinois and New Jersey

**Source quote.**

> This requirement, however, is watered down in the United States by many states that allow corporations to adopt charter provisions that exculpate the directors from liability to the corporation for breach of a duty of care

**From.** Painter and Kaal, *Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in* (2010), IV.B.4. Based on Sufficient Information, page 33

**Cite as.** Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614

**Verify.** sha256 of source PDF `e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Painter%20and%20Kaal%20-%202010%20-%20Initial%20Reflections%20on%20an%20Evolving%20Standard%20Constraints%20on%20Risk%20Taking%20by%20Directors%20and%20Officers%20in.pdf

**Failure mode.** charter exculpation loophole  (family: board-and-oversight-failure)

**Topics.** corporate-governance, law-and-legal-systems

**Keywords.** exculpation-clauses, duty-of-care, informed-basis, director-liability

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