Delaware corporations · officer exculpation

QUESTION · DELAWARE CORPORATIONS

Authorities accessed August 17, 2026

Yes, the charter can shield officers from money damages for careless decisions.

Yes, since August 1, 2022. The 2022 amendment to 8 Del. C. §102(b)(7) lets the certificate of incorporation eliminate or limit covered officers' personal liability for money damages for duty-of-care breaches. The charter must say so. The statute gives officers no protection on its own.

What the shield covers, and what it never covers.

8 Del. C. §102(b)(7), accessed August 17, 2026.

Which claims and officers can it cover?

A charter provision can reach direct stockholder claims seeking money damages from an officer for a duty-of-care breach. It limits that remedy; it does not erase the duty. 8 Del. C. §102(b)(7)

"Officer" means the president, CEO, COO, CFO, chief legal officer, controller, treasurer, or chief accounting officer; an executive identified as one of the most highly compensated in SEC filings; or a person who agreed in writing to be treated as an officer for this purpose. 10 Del. C. §3114(b)

How does the corporation adopt it?

First, the board adopts a resolution that sets out the amendment and declares it advisable. The proposal then goes to the stockholders for the required vote. After approval, the corporation executes and files a certificate of amendment. 8 Del. C. §242(b)(1)

The amendment is effective when filed unless it states a permitted later effective time. 8 Del. C. §103(d)

The board must act first. The corporation cannot begin with a stockholder vote.

What can it never cover?

The statute always leaves officers exposed for breaches of the duty of loyalty; acts or omissions not in good faith; intentional misconduct; knowing violations of law; and transactions from which the officer received an improper personal benefit. 8 Del. C. §102(b)(7)(i), (ii), (iv)

Unlike directors, officers also stay exposed in actions brought by the corporation or in its right, so derivative claims stay live against officers. 8 Del. C. §102(b)(7)(v)

The provision cannot reach an act or omission that happened before it took effect.

Why would a board do it?

It can put officers closer to directors on protection from money claims over careless decisions, reducing a gap that can complicate executive recruiting and retention.

It also changes settlement pressure. A care claim dismissed against exculpated directors could otherwise continue against officers on the same facts.

The amendment narrows one damages remedy. It does not protect loyalty breaches, bad faith, improper benefits, or derivative claims against officers.

Next step. The board adopts the resolution. The stockholder vote and the filing follow from it.

This page addresses a Delaware stock corporation adding officer exculpation to its certificate of incorporation. It is not legal advice. It reflects the Delaware Code accessed August 17, 2026 and does not analyze a particular charter, class-vote requirement, claim, or officer.