On the complementary relationship between the Delaware Business Judgment Rule and the U.S. Department of Justice Corporate Compliance Program Guidelines
DOI:
https://doi.org/10.34858/api.4.2025.91Keywords:
corporate governance, Delaware General Corporation Law, soft law, Business Judgment Rule, complianceAbstract
Although the Business Judgment Rule (BJR) in Delaware law and the U.S. Department of Justice's Corporate Compliance Program Guidelines (DOJ Guidelines) differ in their normative nature, representing hard law and soft law, both legal institutions share a similar functional purpose: protecting decision-making processes. The BJR protects managers from corporate liability for poor business decisions, provided they act in accordance with the law and their fiduciary duties, while the DOJ Guidelines protect corporations from criminal liability if they demonstrate an effective compliance program. The aim of this article is to compare the BJR and the DOJ guidelines and demonstrate the complementary relationship between them, not only that they complement but even reinforce each other. The acceptance of this research hypothesis is supported by the fact that the BJR defines the premises and scope of protection for managers' business decisions, while the DOJ guidelines define minimum organizational standards protecting corporations. This approach has comparative value, especially in the context of facilitating the interpretation of two new provisions introduced in Polish law in 2022: Article 293 § 3 and Article 483 § 3 of the Act of September 15, 2000 – the Commercial Companies Code. Furthermore, the article enriches the discussion on corporate governance, legal compliance, and managerial responsibility, in particular by presenting a case study on balancing managerial freedom to foster innovation while simultaneously protecting it from corporate and criminal liability.
Downloads
References
Aronson v. Lewis, 473, Supreme Court of Delaware, A.2d 805, 812 (1984).
View in Google Scholar
Bryan v. Aikin, Delaware Court of Chancery, 82 A. 817, 10 Del.Ch. 1 (1912).
View in Google Scholar
Graham v. Allis-Chalmers Mfg. Co., Supreme Court of Delaware, 188 A.2d 125 (1963).
View in Google Scholar
In re Caremark Int’l Inc. Derivative Litig., Delaware Court of Chancery, 698 A.2d 959 (1996).
View in Google Scholar
Kaplan v. Centex Corp., Delaware Court of Chancery, 284 A.2d 119, 124 (1971).
View in Google Scholar
Malpiede v. Townson, Supreme Court of Delaware, 780 A.2d 1075 (2001).
View in Google Scholar
Puma v. Marriott, Delaware Court of Chancery, 283 A.2d 693, 695 (1971).
View in Google Scholar
Robinson v. Pittsburgh Oil Refinery Corp., Delaware Court of Chancery, 126 A. 46 (1924).
View in Google Scholar
Shlensky v. Wrigley, Illinois Appellate Court, 237 N.E.2d 776, 780 (1968).
View in Google Scholar
U.S. v. Basic Constr. Co., United States Court of Appeals, Fourth Circuit, 711 F.2d 570, 573 (1983).
View in Google Scholar
U.S. v. Beusch, United States Court of Appeals, Ninth Circuit, 596 F.2d 871, 878 (1979).
View in Google Scholar
U.S. v. Hilton Hotels Corp., United States Court of Appeals for the Ninth Circuit, 467 F.2d 1000, 1007 (1972).
View in Google Scholar
U.S. v. Potter, United States Court of Appeals, First Circuit, 463. F.3d 9, 25 (2006).
View in Google Scholar
Badawi A.B., The Business Judgment Rule, dx.doi.org/10.2139/ssrn.4465571.
View in Google Scholar
Bainbridge S.M., Corporate Law, 3rd ed., Foundation Press, 2015.
View in Google Scholar
Bainbridge S.M., Corporation Law and Economics, Foundation Press, 2002.
View in Google Scholar
Bainbridge S.M., The Business Judgment Rule as Abstention Doctrine, „Vanderbilt Law Review” 2019, vol. 57.
View in Google Scholar
Beresford D.R., Katzenbach N., Rogers C.B., Jr., Report of Investigation by the Special Investigative Committee of the Board of Directors of WORLDCOM, INC., EX-99.1 3 dex991.htm, March 31, 2003.
View in Google Scholar
Bishop C.G., A Good Faith Revival of Duty of Care Liability in Business Organization Law, „Tulsa Law Review” 2006, vol. 41.
View in Google Scholar
Black L.S., Jr., Why Corporations Choose Delaware, Delaware Department of State, Division of Corporations, 2007.
View in Google Scholar
Block D.J., Barton N.E., Radin S.A., The Business Judgment Rule: Fiduciary Duties of Corporate Directors, „Aspen Law & Business” 1998, t. 1.
View in Google Scholar
Brejdak J., Czy prezes spółki powinien być filozofem? O zasadzie business judgment rule, która doczekała się swojej kodyfikacji w Polsce, „Prawo i Więź” 2021, nr 4.
View in Google Scholar
Brodsky E., Adamski M.P., Law of Corporate Officers and Directors: Rights, Duties, and Liabilities, West, 2011.
View in Google Scholar
Bullock J.W., Delaware Division of Corporations: 2023 Annual Report, U.S. Secretary of State, 2023.
View in Google Scholar
Carney W.J., Shepherd G.B., Bailey J.S., Lawyers, Ignorance, and the Dominance of Delaware Corporate Law, „Harvard Business Law Review” 2012, vol. 2.
View in Google Scholar
Carpenter L.R., The Delaware Corporation, Johns Hopkins Press, 1937.
View in Google Scholar
Cunningham L., Delaware Corporate Law Debate Feeds a Robust and Balanced System, „Bloomberg Law” 2024, December 11, 2024.
View in Google Scholar
Delaware Courts, Judicial Branch, Opinions and Orders, courts.delaware.gov/ opinions.
View in Google Scholar
Desio P., An Overview of the Organizational Guidelines, U.S. Sentencing Commission.
View in Google Scholar
Eisenberg M.A., The Duty of Good Faith in Corporate Law, „Delaware Journal of Corporate Law” 2005, vol. 31, No. 1.
View in Google Scholar
Enron Trial Exhibits and Releases, The U.S. Department of Justice, Archives, www.justice.gov/archive/index-enron.html.
View in Google Scholar
Epstein R.A., The harm principle-and how it grew, „The University of Toronto Law Journal” 1995, vol. 45.4.
View in Google Scholar
Evaluation of Corporate Compliance Programs, U.S. Department of Justice, Criminal Division, updated September 2024.
View in Google Scholar
Facts and Myths, „Delaware Corporate Law”, corplaw.delaware.gov/facts-and-myths.
View in Google Scholar
Feinberg J., Harm to others, The Moral Limits of the Criminal Law, Oxford University Press on Demand, 1987.
View in Google Scholar
Fisch J.E., The Peculiar Role of the Delaware Courts in the Competition for Corporate Charters University of Pennsylvania, „University of Cincinnati Law Review” 2000, vol. 68.
View in Google Scholar
Galeotti M.R., Memorandum on Selection of Monitors in Criminal Division Matters, U.S. Department of Justice, Criminal Division, Washington, D.C., May 12, 2025.
View in Google Scholar
Guidelines for Good Practice in Internal Control, Ethics and Compliance, Council of the Organisation for Economic Co-operation and Development (OECD), 8 February, 2010.
View in Google Scholar
Guidelines Manual 2016, United States Sentencing Commission, Chapter Eight – Sentencing of Organizations.
View in Google Scholar
Handbook on Anti-Corruption Ethics and Compliance for Business, OECD, the United Nations Office on Drugs and Crime and the World Bank, 2013.
View in Google Scholar
Joseph S. Nye Jr., Think Again: Soft Power, „Foreign Policy”, February 23, 2006, foreignpolicy.com/2006/02/23/think-again-soft-power/ [dostęp: 28.11.2022].
View in Google Scholar
Langevoort D.C., Soft Law, Risk Cultures, and Law Abidingness: The Caremark Connection, „Georgetown Law Faculty Publications and Other Works” 2022.
View in Google Scholar
Larence E.R., Corporate Crime: Preliminary Observations on DOJ’s Use and Oversight of Deferred Prosecution and Non-Prosecution Agreements 1, U.S. Government Accountability Office, Gao-09-636t, 2009.
View in Google Scholar
Manne H.G., Our Two Corporation Systems: Law and Economics, „Virginia Law Review” 1967, vol. 259, No. 2.
View in Google Scholar
McMillan L., The Business Judgment Rule as an Immunity Doctrine, „William & Mary Business Law Review” 2013, vol. 4, Iss. 2.
View in Google Scholar
Oversight on the U.S. Sentencing Commission and Guidelines for Organizational Sanctions: Hearings Before the Subcommittee on Criminal Justice of the Committee on the Judiciary, House of Representatives, One Hundred First Congress, Second Session, March 7 and May 24, t. 4, 1990.
View in Google Scholar
Seligman J., A Brief History of Delaware's General Corporation Law of 1899, „Delaware Journal of Corporate Law” 1976, vol. 1, No. 2.
View in Google Scholar
Sharfman B.S., The Importance of the Business Judgment Rule, „New York University Journal of Law and Business” 2017, vol. 14.
View in Google Scholar
Summers R.S., Good Faith’ in General Contract Law and the Sales Provisions of the Uniform Commercial Code, „Virginia Law Review” 1968, vol. 54, No. 2.
View in Google Scholar
The Financial Aspects of Corporate Governance, The Committee on the Financial Aspects of Corporate Governance, 1 December, 1992.
View in Google Scholar
Tricker B., Corporate Governance: Principles, Policies and Practices, Third Edition, Oxford University Press 2015.
View in Google Scholar
U.S. Attorneys' Manual, U.S. Department of Justice.
View in Google Scholar
U.S. Federal Sentencing Guidelines, U.S. Department of Justice.
View in Google Scholar
U.S. Sentencing Guidelines for Organizations, U.S. Department of Justice.
View in Google Scholar
Veasey E.N., Economic Rationale for Judicial Decisionmaking in Corporate Law, „Business Lawyer” 1998, vol. 53.
View in Google Scholar
Weinberg J.D., Delaware Court Strengthens Protections for Independent Directors, „Harvard Law School Forum on Corporate Governance”, May 20, 2015.
View in Google Scholar
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Robert Lizak
This work is licensed under a Creative Commons Attribution 4.0 International License.
