kaal:claim:3017612-004

Shareholder agreement terms that limit board authority are vulnerable to invalidation, and the dominant judicial rationale is that such agreements tie the hands of directors and make it impossible for them to exercise discretion over the matters the agreement settles.

Courts offer varying rationales for nullifying terms of shareholder agreements that limit the board's authority, but most often, courts worry the agreements "tie the hands of the directors," making it impossible for them to exercise their discretion concerning matters decided in the agreement.

Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017), II. Regulation of Shareholders' Agreements, p. 3
https://ssrn.com/abstract=3017612 · source PDF

Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

• provisions that encroach on the directors' statutory authority to manage the business and affairs of the corporation

failuresupport: arguedfailure: director-discretion-sterilizationfamily: board-and-oversight-failurecorporate-governance

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Attestation record: colloquium/attestations/fef6875ec4a1d35d...json
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