4.4 Rethinking discharge from directors’ liability

Unlike in Delaware, where the scope of the exculpatory provision is restricted by law and has frequently been tested in court, Dutch courts must consider discharge claims case by case. As only few discharge claims have been brought under court review, Dutch case law on the topic of discharge is still evolving.1 The comparative and empirical insights acquired in the previous paragraphs may contribute to further develop the Dutch concept of discharge. In this paragraph, I will focus on further developing the legal doctrine ‘limited scope of discharge’ by adopting directors’ ‘subjective good faith’ as a baseline for the review of discharge claims. As the cases under study demonstrate, Dutch courts tend not to allow a discharge to apply to actions by directors performed in ‘subjective bad faith’. At present, Dutch courts do, however, imply that the ‘subjective good faith’ of directors is a condition of discharge. Inmy opinion,making the ‘subjective good faith’ of directors an explicit condition would make the legal doctrine on discharge more consistent with empirical reality and would make it function more appropriately as a contributor to good corporate governance in the Netherlands.