180.0828 Limited liability of directors.
(1) Except as provided in sub. (2), a director is not liable to the corporation, its shareholders, or any person asserting rights on behalf of the corporation or its shareholders, for damages, settlements, fees, fines, penalties or other monetary liabilities arising from a breach of, or failure to perform, any duty resulting solely from his or her status as a director, unless the person asserting liability proves that the breach or failure to perform constitutes any of the following:
(a) A willful failure to deal fairly with the corporation or its shareholders in connection with a matter in which the director has a material conflict of interest.
(b) A violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful.
(c) A transaction from which the director derived an improper personal profit.
(d) Willful misconduct.
(2) A corporation may limit the immunity provided under this section by its articles of incorporation. A limitation under this subsection applies if the cause of action against a director accrues while the limitation is in effect.
History: 1989 a. 303.
Wisconsin's business judgment rule is codified in this section. The business judgment rule is substantive law because acts of the board of directors done in good faith and in the honest belief that its decisions were in the best interest of the company cannot form the basis for a legal claim against directors. It is also procedural because it limits judicial review of internal corporate business decisions made in good faith. The rule creates an evidentiary presumption that the acts of the board of directors were done in good faith and in the honest belief that its decisions were in the best interest of the company. Data Key Partners v. Permira Advisers LLC, 2014 WI 86, 356 Wis. 2d 665, 849 N.W.2d 693, 12-1967
In order to fall outside of the protection that this section grants directors, plaintiffs must plead facts that create a plausible claim that the directors' acts were taken in contravention of sub. (1). To survive a motion to dismiss, plaintiffs must plead facts sufficient to plausibly show that the directors' actions constitute: 1) a willful failure to deal fairly with the minority shareholders on a matter in which the director has a material conflict of interest; 2) receipt of an improper personal profit; or 3) willful misconduct. Data Key Partners v. Permira Advisers LLC, 2014 WI 86, 356 Wis. 2d 665, 849 N.W.2d 693, 12-1967
The Business Judgment Rule in Wisconsin. Davis. 2015 WLR 475.
Protecting Corporate Directors: Wisconsin's Business Judgment Rule. Davis. Wis. Law. June 2015.