Peoples stated that the fiduciary duty should be judged from an objective standard which takes in to account the elements that the decision was made in, but not the director’s subjective motivations. They said the comparable circumstances require the context in which a given decision was made to be taken in to account, but that does not mean the competence of the director. I think in the context of board meetings by telephone it would require that it was the best option available. In situations where the directors are not in the same region and will not be able to make it there quick enough for a board meeting, a meeting via telephone would suffice. I think in this day and age, with the majority of large companies being multinational, board meetings by telephone may be the best option for directors at times given the circumstances.
Soper, which was a decision prior to Peoples, stated that a director does not need to perform his or her duties to a greater degree of skill and care then may be reasonably expected from a person of his or her knowledge and experience. They went on to say that they only have to attend meetings that are reasonably possible to attend. Peoples clearly stated that a director’s competence should not be considered when deciding whether they fulfilled their fiduciary duty to the company, therefore, the principles of Soper are not exactly the same as Peoples. I think Peoples used the principles from Soper as a starting point, but then decided to raise the threshold for what constitutes a director fulfilling his or her fiduciary duty.
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