We have great deals of news today, consisting of Disney’s change of mind on Hulu (see listed below) and Google’s blizzard of brand-new item statements at its yearly designer conference. For more on Google, see here. But probably the most essential though little-covered newspaper article today was a Delaware court’s choice on Tuesday to decline an investor suit over Block’s boneheaded purchase of musical streaming service Tidal. While finding that the approximately $300 million purchase was a “terrible business decision,” the judge verified the right of independent boards to do foolish things as long as they’re acting in “good faith,” whatever that indicates. That’s bad news for any financier who desires business boards to press back more highly versus tech creators doing insane things (believe Adam Neumann).
The judgment deserves a read, however here’s the brief variation. A group of independent directors on the board of Block, the Jack Dorsey–managed owner of Square and CashApp, all authorized the Tidal purchase Dorsey proposed although senior business executives opposed it and there was every factor not to do it. The judge turned down a Block investor suit that argued the board’s approval was a breach of its fiduciary responsibility, since the investor hadn’t showed the directors acted in “bad faith.” This isn’t precisely advance for business governance. (Incidentally, the directors in this case consisted of Sequoia Capital’s “senior steward,” Roelof Botha, whom we profiled last Friday).
