Symmetry and Dissonance in Corporate Law: Perfecting the Exoneration of Directors, Corrupting the Indemnification and Straining the Framework of Corporate Law

Thursday, January 1st, 1998 at 12:00 am by Mae Kuykendall
Mae Kuykendall, Symmetry and Dissonance in Corporate Law: Perfecting the Exoneration of Directors, Corrupting the Indemnification and Straining the Framework of Corporate Law, 1998 Colum. Bus. L. Rev. 443

This article provides a historical and conceptual critique of the increasing disparity between standards of conduct and standards of liability in corporate law. The large-scale cancellation of director liability through liberal exculpation and related indemnification rules and practices is characterized as a doctrinal formation with substantive effects. This article coins the term “exoneration canon” to describe the decisional norms that favor the protection of directors from liability. The pressure for virtually seamless protection is compared to the contemporary “tort reform” movement. Finally, the Article develops the argument that adjudication and indemnification are logically distinct operations that should be preserved and held separate–to avoid degrading the aspirational components of indemnification and to avert an implicit devaluation of court judgments by parallel corporate “adjudications.”

Author Information

Professor of Law, Detroit College of Law at Michigan State University