3. Materiality in the Disinterested Stockholder Voting Context
In this Part we have thus far explored how evaluation of overall economic interest might affect the assessment of whether the vote or tender of shares held by an institutional investor should be considered “disinterested.” What remains to be explored is how to assess whether an overall economic interest should be deemed “material” enough to qualify as an “actual economic stake” sufficient to warrant deference. In the case of large institutional investors, this is a complex inquiry.
For BlackRock, State Street, Vanguard, and other very large asset managers, a simplistic approach to this inquiry—one based on the impact on the trillions in assets under management—would almost inevitably disqualify such asset managers from being “disinterested” shareholders with respect to most of the companies in which they had stakes. Among other things, the “actual economic stake” in any one company would, in the usual case, be almost trivial in relation to the trillions under management.
Instead, we suggest an approach to the materiality/“actual economic stake” inquiry in which courts would evaluate materiality from two distinct perspectives: (a) that of the institutional investor (a perspective largely focused on issues of magnitude of economic influence on the decision), and (b) the potential for affecting the overall result of a vote (a perspective largely focused on issues of probability).
To explain: we start with the foundational concept of materiality under federal securities law as established in TSC Industries and adopted in corporate fiduciary law by the Delaware Supreme Court:
An omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote. . . . [This standard] does not require proof of a substantial likelihood that disclosure of the omitted fact would have caused the reasonable investor to change his vote. What the standard does contemplate is a showing of a substantial likelihood that, under all the circumstances, the omitted fact would have assumed actual significance in the deliberations of the reasonable shareholder.
This concept of materiality focuses on a “substantial likelihood” that a fact “would have assumed actual significance in the deliberations of the reasonable shareholder.” Reframed to the question of “disinterestedness,” courts would ask whether there is a “substantial likelihood” that the pertinent overall economic interest “would have assumed actual significance in the deliberations” of a reasonable shareholder in deciding how to vote or whether to tender shares.
As explained below, the probability/magnitude test used in federal securities law with respect to contingent or speculative events helpfully refines this inquiry. Under that test, materiality “will depend at any given time upon a balancing of both the indicated probability that the event will occur and the anticipated magnitude of the event in light of the totality of the company activity.”
As for the “magnitude” half of that test, courts would examine an investor’s relative percentage ownership in the host and the counterparty as well as the magnitude of the dollar ownership stakes to determine the resulting differential impact. The question would then become whether there would be a substantial likelihood that, under all the circumstances, the differential impact assumed actual significance in the deliberations of a reasonable shareholder with similar ownership stakes in deciding how to vote or whether to tender. To illustrate, the overall dollar impact of a $5 million differential on stakes of $10,000,000 or $20,000,000 in the host shares and related non-host assets clearly would be sufficiently large to satisfy the magnitude element of the materiality test. In contrast, a $100,000 differential would clearly be too small to satisfy that element.
As for the “probability” half of the magnitude/probability test, we consider the perspective of the overall outcome of a vote or tender offer: i.e., the potential that the investor’s shares, together with other similarly situated investors, might affect the overall outcome. The recent Tesla case illustrates the point: despite recognizing the possibility that institutional cross-ownership of Tesla and SolarCity shares might detract from deference, the court nevertheless relied on the strongly favorable (85 percent) stockholder vote in ruling that the deal was substantively fair.
More generally, where a vote is lopsidedly favorable, the overall economic interest of an investor with a minuscule percentage interest in host shares is almost inherently immaterial and can be safely ignored, regardless of the materiality of the interest to the investor in question. Conversely, where the overall vote (or tender response) is barely sufficient to support a challenged transaction, the motivations of an institutional investor with a quite modest percentage interest might nevertheless be considered to be material because of the potential to change the result. And even where a single investor’s overall percentage interest might standing alone be deemed unlikely to affect the outcome of a vote, it may nevertheless satisfy the “probability” element of the materiality test if its interest, together with the interests of other investors with similar overall economic interests, would be deemed likely to affect the outcome.
Using the foregoing general concept of materiality and the specific magnitude/probability test, if an institutional investor has a material positive economic interest in the host shares, those shares should be considered disinterested with respect to the vote at the host company.
The question arises: should the votes of an institutional investor who has zero or near-zero overall economic interests be entitled to deference? If we analogize such institutional investors to the directors with zero or near-zero overall economic interests situation that we discussed in Part II.B, such institutional investors should be entitled to deference. The argument for such a position would be that, just as a director has a fiduciary duty with respect to the value of the host shares, an institutional investor has a duty to vote with a similar motivation because of its fiduciary obligations to its clients. The problem with this analogy is that the director owes its fiduciary duties only with respect to the shares of one company: the host company on whose board the director is making a decision. In contrast, the fiduciary duty of the institutional investor is not with respect to the shares of the host company, but instead to the clients for whom it invests. Clients are interested in the overall returns from the holdings of the institutional investor—e.g., the overall returns from holding the host company shares and the counterparty shares—not solely the returns flowing from any single holding—e.g., the holdings of the host company shares. So with an institutional investor in this concurrent ownership context, there is no fiduciary obligation to vote in ways that would enhance the value of its shares in the host company.
C. Whither Deference? Incremental Steps, Wholesale Rethinking, and a Strategic Pause
Such institutional financial stake complexities and organizational voting dynamics complexities, in tandem with the doctrinal insistence in Delaware case law that “disinterestedness” requires having an “actual economic stake in the outcome of the vote,” will, among other things, often disqualify institutional investor voting in public companies from being considered sufficiently “disinterested” to validate fiduciary decision-making.
One general response to this situation would be to reduce the importance accorded to shareholder votes and tendering as guides to shareholder preferences. A diametrically opposite approach would be to continue to adhere to the disinterested shareholder voting fiction and ignore the many issues noted above, on the theory that somehow the overall results are good enough and doing anything in response could not be justified on a cost-benefit basis.
More broadly, one of us has written extensively on disclosure, substantive, and other strategies that courts, legislators, regulators, the share-lending market, corporate private ordering, and those responsible for the voting architecture can implement to promote the efficacy of the stockholder franchise. We do not try here to offer an overview of these strategies. Proper analysis of deference to “disinterested” shareholder decision-making is inextricably linked with the larger stockholder franchise issue as well as addressing the fundamental conceptual complexities identified in this Article directly related to this deference. The issues are manifold and many involve re-consideration of bedrock matters of corporate law. It is beyond the scope of this—or any one—article to deal definitively and exhaustively with this. Instead, we briefly outline a few of the many steps that might help preserve the integrity of the validating role of shareholder voting and tendering, yet mitigate some of the “disinterestedness” problems identified above.
Two related steps which resonate throughout this Article relate to the recognition of the existence and size of potential problems in voter motivation. First, if and when the courts assess voter motivation, they should use the deconstruction methodology for assessing overall economic interest in host shares flowing from the net returns of holdings of: (a) host shares; (b) coupled assets; and (c) related non-host assets. Negative, positive, or zero (or not materially negative or positive) status of the overall economic interest in host shares, and not the mere presence of concurrent ownership, would provide the pole star for ascertaining the motivation, an essential initial step in considering the extent of judicial deference. The second, closely related step is to gauge the materiality of the overall economic interest in host shares using the magnitude/probability concept of materiality for institutional investors outlined in Part III.B.3.
A third step similarly permeates this Article, one relating to what to do in response to an identified problem in voter motivation—but we do not advocate its immediate implementation. Instead, we propose a temporary strategic pause of a limited nature for the reasons to be explained shortly. That said, under a faithful treatment of the policy basis adopted by Delaware law for judicial deference—an “actual economic stake” in host shares—courts should not regard as “disinterested” the votes or tenders of institutional holders that do not have material positive overall economic interests in the host shares. As was discussed in connection with CNX/CONSOL, T. Rowe Price did not qualify as “disinterested” because it had a near-zero overall economic interest in the CNX host shares while BlackRock would not qualify because its overall economic interest in CNX host shares was decidedly negative. In neither situation did the investor have an “actual economic stake” in the host shares, and declining to give deferential effect to the vote or tender of such investors would enhance the credibility of using shareholder voting and tendering as a basis for reducing or eliminating litigation requiring judicial scrutiny of fiduciary conduct.
To be sure, courts have already taken these or related steps on a limited basis, and there are substantial obstacles to doing so in a more comprehensive way. There are ways, however, in which such steps could be more systematically implemented or facilitated. We have already discussed how Vice Chancellor Slights’ Tesla opinion put less weight on shareholders who, in the terminology of the decoupling framework, held related non-host assets and how the earlier Hawkins, TR Investors, and Crown EMAK cases addressed decoupling. The British Columbia Supreme Court court opinion in TELUS, one of the most hotly contested proxy fights in Canadian history, relied explicitly on the decoupling framework in weighing votes. The court found “in all likelihood” that a hedge fund was an “empty voter with negative economic ownership” within the meaning of the framework and that this status was relevant to the court’s consideration of the hedge fund’s objections to the company’s proposal.
The SEC and private ordering could play roles as well. With respect to financial stakes, enhanced SEC disclosure requirements as to coupled assets such as short-selling arrangements regarding host shares, derivatives and other hedges relating to host shares, and share borrowing should be considered on a cost-benefit basis. In terms of private ordering, many companies already require shareholders to provide information pertaining to their decoupled equity and voting interests in contexts such as advance notice bylaws and poison pills. Section 212(a) of the Delaware General Corporation Law would allow corporations to adopt a charter provision conditioning entitlement to vote on providing specified information pertinent to the assessment of overall economic interest.
Fourth, where defendants seek to rely on shareholder voting or tendering to support a transaction, the courts could require that defendants gather and process, at a minimum, publicly available information from asset managers relating to their financial stakes and organizational voting policies. Defendants could use information from such SEC filings as 13D, 13G, and 13F; public information about whether institutions accommodate the preferences of clients and individual portfolio managers, and public statements about the willingness of asset managers to depart from a pure focus on the returns on host shares on ESG or other grounds. In the rare instance of clear departures from the goal of furthering the pecuniary interest of clients, courts could decline to treat voting shares as “disinterested.”
Perhaps most important as a practical matter, however, we advocate a strategic pause of a limited nature in implementing our approach to the increasingly common problem associated with the related non-host assets of institutional investors. Specifically, we suggest that instead of a blanket rule disqualifying institutional investors on the basis of an insufficiently positive overall economic interest in the host shares, plaintiffs seeking to disqualify an institutional investor’s votes would have the burden of proving that its ownership of related non-host assets resulted in a negative overall economic interest that was material in the strict sense we described above. That approach would involve temporarily suspending the insistence under current corporate doctrine that a vote is “disinterested” only when it is by a person with an “actual economic stake in the outcome of the vote,” and relying instead on a presumption that an institutional investor will likely vote its host company shares in a manner that it believes will promote the value of those shares, unless the plaintiff can meet the above burden of proof as to the magnitude of the negative overall economic interest in host shares and the potential to affect the outcome of the vote.
The incrementalism inherent in this strategic pause has real advantages in addressing novel, complicated issues flowing from capital market dynamism. Less information is required, the results are more predictable, and if the change proves misguided, the changes are easier to reverse. For us, a related motivation for a strategic pause stems from the concerns earlier expressed about how extensive disqualification of institutional investor votes would shift significant “disinterested” voting power to retail investors. We emphasize the temporary nature of the pause and possible reversal. Close analysis of this matter would be an integral part of the wholesale rethinking of deference to shareholder decisions we are urging.
IV. Decoupling and De-SPACing: Idiosyncratic Stakes in a Single Entity
To this point we have been examining contexts in which fiduciary and shareholder motivations flow from having stakes in both firms that are party to a transaction. In this Part, in contrast, we illustrate how full deployment of the deconstruction methodology can yield fresh insights in a context—“deSPACing”—where highly idiosyncratic stakes in a single entity can cause fiduciaries and shareholders to have widely disparate economic incentives.
A. Delman’s Approach to Fiduciary and Shareholder Decisions
The modern form of the “special purpose acquisition corporation” (SPAC) and associated “de-SPACing” process grew spectacularly in popularity from 2018 to early 2021. In essence, a sponsor would form a company (a special purpose acquisition corporation or “SPAC”) with no assets and no operating business and do an initial public offering (“IPO”). Having raised this money, the SPAC would, within a specified period (typically a year or two), seek to merge with a private company with an operating business. At this “de-SPAC” stage, the SPAC issues shares to the owners of the private company. After the de-SPAC, the SPAC carries on as a public company—but is now one with a real operating business. And the private company has gone public without having to undertake the time-consuming, underwriter-driven process of doing a traditional IPO.
The complex ownership stakes in the SPAC create difficult motivation issues in fiduciary and shareholder decision-making. Although de-SPACing involves a merger—a familiar transaction involving two firms—the real core of such difficulties lies with the nature of financial stakes in a single firm, the SPAC itself.
Public investors who buy shares in a SPAC IPO are protected in several ways. First, the IPO proceeds are placed in an escrow account and these investors may later redeem their shares. Investors may redeem if, for example, they do not like the proposed merger. Other public investors may like the proposed merger and continue to hold the shares after the merger. Second, if no de-SPAC merger occurs within a specified period, the SPAC is liquidated. Third, in the SPAC IPO, the investors typically receive both a share of common stock and additional securities (a “right” and/or a “warrant”) that give them an option to buy additional shares after a de-SPAC merger. There is a secondary market for the shares as well as for the warrants, which trade separately.
The sponsor obtains its substantial shareholdings in the SPAC for a nominal amount. However, unlike the shares held by unaffiliated investors, the sponsor’s shares have no right to the escrow account. Thus, if a de-SPAC merger does not occur, the sponsor’s shares become worthless.
Vice Chancellor Will issued all three of the Delaware decisions relating to judicial deference in de-SPAC transactions. We focus on the key January 2023 Delman opinion, the one that dealt with deference in connection with both the issue of the standard of review for controller decision-making and the application of Corwin cleansing by shareholder vote, and was the only one to draw on the decoupling framework.
In May 2020 the SPAC involved in the 2023 Delman case—GigCapital3, Inc. (Gig3)— sold 20 million units in an IPO at $10 per share, each unit consisting of a share of common stock and three-quarters of a warrant to buy a share of common stock at $11.50 a share. If Gig3 did not complete a de-SPAC merger within 18 months, Gig3 would liquidate and the public stockholders would receive their $10 per share plus interest but keep the warrants. Gig3 completed a deSPAC merger with Lightning eMotors Inc. (“Lightning”) a year after the IPO. Over 98 percent of the votes were cast for the merger. About 29 percent of the public stockholders elected to redeem their shares. But the merger did not turn out well: Gig3’s share price fell to $6.57 a share within three months and had sunk to $0.41 the day before the court’s decision.
Regarding the decision-making of the controller, the court applied the standard of entire fairness, on the view that the controller received a “unique benefit” by “extracting something uniquely valuable to the controller, even if the controller nominally received the same consideration in the merger with Lightning as other stockholders. In the court’s view one such unique benefit was that if the merger went through, the sponsor’s shares would have value, but if Gig3 were liquidated its holdings would be worthless. In contrast, public stockholders would receive their investment plus interest from the escrow account in a liquidation. So no deal was preferable to one worth less than the liquidation price. The other unique benefit flowed from the sponsor’s interest in minimizing redemptions after the merger agreement was signed, which had the result that, among other things, the sponsor “effectively competed with the public stockholders for the funds held in trust.”
As for the shareholder vote, finding that “the structure of the Gig3 stockholder vote was inconsistent with the principles animating Corwin,” Vice Chancellor Will rejected the defendants’ contention that the stockholder vote should result in business judgment deference. Explicitly relying in part on the decoupling framework, the court reasoned:
Stockholders’ voting interests were decoupled from their economic interests. Gig3’s public stockholders could simultaneously divest themselves of an interest in New Lightning by redeeming and vote in favor of the deal. Many did. Although 98 percent of all Gig3 stockholders (according to the defendants) voted for the merger, 29 percent of the public stockholders redeemed their shares.
Public stockholders had no reason to vote against a bad deal because they could redeem. Moreover, redeeming stockholders remained incentivized to vote in favor of a deal—regardless of its merits—to preserve the value of the warrants included in SPAC IPO units.
B. Deconstruction Methodology’s Approach to Fiduciary and Shareholder Decisions
As to fiduciary decision-making, the court in Delman applied the entire fairness standard without relying on the decoupling framework. The court offered ample justification and certainly did not need to do so. We suggest, however, that deployment of the three-constituent element deconstruction methodology offers an additional pathway to entire fairness that is straightforward and can be used in a wider variety of contexts. The controller in Gig3, like Perry, had a negative overall economic interest in host shares. As with Perry, Gig3’s net returns flowed from: (a) host shares; (b) coupled assets—i.e., contractual provisions zeroing out its interest in the host shares if no merger occurred; and (c) related non-host assets—i.e., the shares in the post-de-SPAC Gig3 that would have value only if the merger occurred, irrespective of whether Gig3 overpaid for Lightning. Applying our Part II analysis, entire fairness review is called for.
Use of the deconstruction methodology has several advantages. First, the methodology offers a standardized, systematic approach to instances of negative overall economic interest, not just de-SPACing, and it does not burden judges with identifying “unique benefits.” Second, Delman’s “unique benefit” reasoning would seemingly apply to all de-SPACing transactions. But if SPAC contractual provisions change as a result of the dismal returns experienced by public investors, the overall economic interest of the controller may not be negative. Entire fairness may be called for under Delman when the deconstruction methodology may call, for example, for enhanced scrutiny.
In contrast, the court in Delman did rely in part on the decoupling framework in assessing the significance of the shareholder vote. However, it did not take full advantage of the framework’s deconstruction methodology. The deconstruction methodology is especially helpful because the warrants were separately traded on the New York Stock Exchange. Under that methodology, public shareholders voting on the de-SPAC had overall economic interests in Gig3 shares that, roughly speaking, fell into four categories:
- (1) public shareholders who redeem their Gig3 shares but hold warrants: these are “empty voters with negative overall economic interest” because they have voting rights but hold (a) zero host shares; (b) coupled assets in the form of warrants that have value only if a merger occurs; and (c) no related non-host assets.
- (2) public shareholders who redeem their Gig3 shares and do not hold warrants: these are “empty voters with zero overall economic interest” because they have voting rights but hold no (a) host shares, (b) coupled assets, or (c) related non-host assets.
- (3) public shareholders who do not redeem and hold some warrants: these would be empty voters, but whether they are empty voters (with zero or negative interests) or voters that do have positive overall economic interests would depend on comparing the returns from (a) host shares with the returns from (b) the coupled assets in the form of warrants that have value only if a merger occurs.
- (4) public shareholders who do not redeem and hold no warrants: these are not “empty voters” because they (a) hold host shares; and do not hold either (b) coupled assets or (c) related non-host assets.
The percentage of redeeming shareholders has been increasing dramatically, and thus the extent of empty voting has as well. A review of all 102 de-SPAC transactions that closed in 2022 found redemption levels that were 80 percent on average, double that for 2021. A different study found that the corresponding percentage for the quarter ended August 31, 2022 was 91.8 percent.
The Delman opinion rests its Corwin analysis in part on the concept that “[s]tockholders’ voting interests were decoupled from their economic interests,” as exemplified by the redeeming shareholders having the right to vote. The votes of the 29 percent of the public shareholders who redeemed were considered by the court to be ineffective to support Corwin cleansing. And this invalidated the effect of the approval of 98 percent of all Gig3 shareholders voting for the transaction.
Under the formal deconstruction methodology, the redeeming shareholders would be either empty voters with negative economic interest (in case of category 1) or zero economic interest (in case of category 2), and thus the vote of the 29 percent of the shareholders should indeed be considered ineffective. However, the methodology raises relevant issues that were not addressed by the court, most important, those pertaining to the votes of the non-redeeming shareholders. That is, the court did not try to identify what percentage of the pertinent non-redeeming public shareholders voted for the merger. In terms of “pertinent,” we mean to refer to those non-redeeming public shareholders with positive overall economic interest: that is, all shareholders who fall in category 4 as well as some of the shareholders who fall in category 3. Thus, rather than a blanket rejection of Corwin cleansing because of redeeming shareholders, deconstruction methodology–based analysis suggests that Corwin cleansing could be given effect under certain circumstances.
There is a broader concern with the Delman approach in its failure to consider the possible impact of holdings of warrants on the economic interest of the non-redeeming shareholders. In effect, Delman classifies shareholders into two groups: “bad” redeeming shareholders—who are basically deemed to be empty voters—and “good” non-redeeming shareholders—who basically are deemed not to be. Consistent with this, Delman explicitly held out the possibility of Corwin cleansing if redeeming shareholders were required to vote against the de-SPAC.
But this two-class classification system and this possibility do not reflect the fact that warrants are tradable and a non-redeeming shareholder who chooses to acquire a large enough number of warrants could have a negative economic interest. Warrants, like options, have value whether or not they are in the money. Indeed, one study found the median trading price of warrants of SPACs that merged in December 2021 to be $1.00 prior to their merger announcements. In contrast to Delman’s approach, the deconstruction methodology approach recognizes in its category 3 the possibility of, in effect, “bad” non-redeeming shareholders.
Assessing the economic motivation of fiduciary and shareholder decision-makers plays a crucial role in determining the scope of judicial review of corporate actions. The analytical framework for decoupling offers a methodology for assessing the overall economic interest in host shares of decision-makers from their financial stakes, a methodology that deconstructs that interest as flowing from three constituent elements: host shares, coupled assets, and related non-host assets. Using this decoupling perspective helps expose deep-seated flaws in existing approaches.
We begin by looking at deference to fiduciary decision-making in the context of the fiduciary having stakes in both parties to a challenged transaction. Using the decoupling perspective, we can show the traditional doctrinal approach has led to application of the entire fairness standard of review in situations where such intensive scrutiny is unnecessary. More broadly, we offer a more general and systematic approach under which the choice among the triad of standards of review—entire fairness, enhanced scrutiny, or the business judgment rule—depends on the decision-maker’s status among the triad of overall economic interest: materially negative, zero, or materially positive.
At the end of the Article, we show how the full deployment of this deconstruction methodology could help address the novel, particularly complex context of de-SPACing. Case law has only used certain elements of the decoupling framework to help determine deference to shareholder decisions (specifically, Corwin cleansing) but has not used the decoupling framework in respect of deference to fiduciary decisions. We show that full deployment of the deconstruction methodology could help courts refine their analysis of shareholder decision-making and also offer an alternative, more methodical, approach to the analysis of fiduciary decision-making.
We hope that these opening and closing suggestions for changes in substantive law are constructive. What we say in between about judicial deference to decisions of “disinterested” shareholders goes beyond suggestions for changes in substantive law. We show the urgent need for a comprehensive rethinking of such deference. At the root of the complexities posed for the traditional approach in determining “disinterestedness” is the now-overwhelming dominance of institutional share ownership in tandem with both new financial stake patterns of institutional investors and new organizational voting dynamics at institutional investors, especially large asset managers. New financial stake patterns associated with coupled assets undoubtedly result in miscounting of “disinterested” votes. Even more important, we show that new financial stake patterns associated with related non-host assets threaten to effectively disqualify the votes of institutional investors with surprising and likely undesirable frequency. Some of the new organizational voting dynamics, such as those relating to pass-through voting, raise practical issues. More troubling, other dynamics run headlong into the bedrock premise of deference to the decisions of disinterested shareholders: that such shareholders seek to maximize the value of their shares. To the extent that institutional investors should consider and have considered non-share price-directed goals, what can be characterized as an elemental “cross-philosophy” dilemma arises.
Recognizing that pervasive institutional investor ownership of related non-host assets may too frequently deprive such investors of “disinterested” status if the longstanding doctrine of “disinterestedness” continues to depend on having an “actual economic stake in the outcome” of a vote or tender, we urge a temporary strategic pause in the requirement of such a stake as a condition to judicial deference. To avoid disruption and to take advantage of the virtues of incrementalism in this kind of context, courts should impose on persons seeking to challenge disinterestedness of an institutional investor the burden of proving that the investor not only had a negative overall economic interest in host shares but one that met the strict “materiality” requirement we specified.
But what is ultimately needed is a wholesale rethinking of what it means to be “disinterested.” That rethinking may in turn require determining whether the importance of disinterested shareholder voting and tendering warrants the costs of gathering and analyzing all the facts relating to such institutional investor–related complexities. It may even require reaching a consensus about the classic role of share value maximization and the associated bedrock premise for deference to disinterested shareholder decisions. In the interests of analytical integrity, something has to budge in what is an important battle in the war of philosophies.
The decoupling framework and its deconstruction methodology offer a fresh perspective on how courts can more systematically and comprehensively assess the motivations of fiduciaries and shareholders flowing from their financial stakes. Applying that perspective, especially in view of transformative changes in institutional investor ownership, the nature of financial stakes, and the organizational voting dynamics of their holders exposes fundamental, yet largely unrecognized, limitations to longstanding corporate jurisprudence while simultaneously offering guidance for shoring up the integrity of that jurisprudence.