In the corporate world the board of directors, regardless of the structure of the corporation, they have a set of responsibilities and duties exclusive to themselves, besides the ones that correspond to the corporation itself and the continuation and betterment of the enterprise. These duties and responsibilities carry a lot of weight in different areas of law, most analyzed thoroughly already and a simple glimpse into this world will show, even without knowing the figures and concepts, it is just part of the identity.
The Board of Directors of a corporation owe fiduciary duty to the corporations and its shareholders, usually viewed under Delaware Law but being similar under other states. In general matters, the actions and decisions of the board and the company’s officers are viewed through the standard of business judgement rule. When there is a change of control, or a proposal to do so, a court or any other governmental agency reviewing the actions of a board will apply a different standard, and the actions and decisions of a board and its officers become subject to a very high level of scrutiny. A way to prevent problems like these are for the parties of a transaction, both nationally and internationally to conduct a due diligence of the whole ecosystem they would be inserting themselves into. One of the most important byproducts of these investigations is the ability to later protect the transaction and the result from courts observation and potential litigation. To satisfy these duties, directors must act in good faith and in a manner, they reasonably believe to be in the best interest of the enterprise and its shareholders. (“M&A Transactions Fiduciary Duties”)
