Commentary: Response to Duesenberg's Article "A View From the Inside"

The application of the "business judgment rule" to decisions by boards of directors or committees not to proceed with derivative litigation against directors or management raises novel and difficult questions. Mr. Duesenberg's well written article ably presents one side of this controversy; as he states, he is offering "a defense of the rule in its more expansive application.” Mr. Duesenberg is writing from the perspective of a general counsel and secretary of a major publicly held corporation, and that perspective—bias, if you will—shows. The first part of this Commentary offers a critique of Mr. Duesenberg's article; the second part consists of my own analysis of the complex issues under discussion.