Chancellor William B. Chandler III is a builder who has transformed the Delaware Court of Chancery into a modern institution. When he became Chancellor in 1997, the docket was maintained on paper, the Court’s jurisdiction stood fixed as it had for generations and the judges sat in old courtrooms unsuited to the demands of modern litigation. Much has changed. The docket is now electronic and accessible from the internet, the Court’s jurisdiction has expanded to encompass new proceedings and means of alternative dispute resolution and the Court has moved into modern quarters. Chancellor Chandler played a key role in all of these developments.
Stephen P. Lamb was vice chancellor in the Delaware Court of Chancery from 1997 to 2009 and is now a partner in the corporate and litigation departments at Paul Weiss.
Chancellor Chandler is also a careful jurist and a vigilant guardian of Delaware’s worldwide renown as the leading jurisdiction for the resolution of corporate and commercial disputes. Chancellor Chandler has consistently exercised his judicial powers to maintain Delaware corporation law as the nation’s most important source of law for investors and businesspeople alike. He has done this by having a clear vision of the proper scope of Delaware law and by reacting intelligently and forcefully to the growing demands in some quarters for a broader application of national rules to govern U.S. public corporations. Chancellor Chandler (acting with other members of the Court and the bar) has led the way in explaining the proper relationship between federal laws and federal regulatory jurisdiction and in resisting further unwarranted incursions by federal lawmakers or regulators into the province of state law.
Scrupulously enforcing fundamental values derived from the twin fiduciary duties of care and loyalty, Delaware corporation law favors private ordering over mandatory regulation of internal corporate affairs. Chancellor Chandler and the other members of the Court of Chancery recognize the vital part played by the Delaware corporation law—with its focus on fundamental principles of good corporate governance rather than prescriptive rules and regulations—in the economic success of the United States. There is nowhere better to see this principle at work than in Chancellor Chandler’s opinions emphasizing the importance of the business judgment rule and the crucial role it plays in encouraging risk taking in the management of for- profit corporations. In the wake of the recent financial crisis, it would have been an easy matter to lay the blame for the enormous losses suffered by major financial institutions at the feet of boards of directors. After all, those directors clearly did not adequately foresee or appreciate the risks inherent in the corporation’s operations. Instead, Chancellor Chandler has taken pains—and no doubt flak from some quarters—to remind us all that the decisions taken by boards of directors to engage in lines of business, especially those that result in large losses, remain business judgments even when they turn out badly. Courts applying Delaware law will never examine those decisions with hindsight bias or second-guess them. The business judgment rule, including its fundamental presumption that directors act in good faith and after adequate investigation, remains precisely to promote the risk taking that is necessary to the success of all for-profit enterprises.
As I know better than most, Chancellor Chandler works tirelessly to meet the many demands of his judicial and administrative responsibilities. All of us in Delaware and in the broader community of investors and business leaders across the nation owe him a substantial debt of gratitude for his service.