Corporate Governance

Ryan v. Lyondell Chemical Company and Waiver of Liability Provisions (Interlocutory Appeal Denied)(The Need for Gender Diversity and Gender Neutrality)

By J. Robert Brown

One of the things we in the ivory tower like to stress is the need for students to act in a gender neutral manner when writing briefs or making arguments.  After all, the days when the bench was a male dominated bastion are largely over.  Insensitivity to the issue can, therefore, be embarrassing. 

But not all courts are in fact particularly diverse when it comes to gender.  Delaware is a good example.  The Delaware Chancery court has five Chancellors, all men.  The Delaware Supreme Court?  Five Justices, one woman.   So,about 25% of all lawyers, and 44% of all law students, are women, but in the most important corporate law court in the United States, there is only one.  Indeed, it's roughly the same percentage as the number of women in public company board room (13%).

Which leads us back to the lessons from the ivory tower.  VC Noble's opinion in Lyondell could have used a good editor with an eye toward gender neutrality.  In his opinion, he uses the male gender when making a generic point.  Thus, in footnote 39, VC Noble explains:

• "Yes, undeniably, the directors, in this instance, managed to achieve a good result, but a fiduciary?s discharge of his duties and obligations are not judged merely by the result he achieves." (emphasis added)  Sometimes writers alternate genders but this is not the case in Lyondell. 

The only example?  Not quite.  There was also this one in footnote 17:   

• the Court?s decision, as Ryan correctly points out in his brief opposing certification of an interlocutory appeal, will in no way impede a properly motivated and unconflicted corporate director who attempts to discharge his fiduciary obligations in good faith from successfully asserting a Section 102(b)(7) defense on a fully developed summary judgment record (or at any other proper procedural state, for that matter).  

Perhaps if the bench in Delaware were more representative, these things wouldn't happen.  Perhaps if they were more representative, the decisions wouldn't be so consistently oriented against shareholders.

The opinion and some of the pleadings can be found at the DU Corporate Governance web site.

Full post as published by The Race to the Bottom on September 12, 2008 (boomark / email).