Patriot Scientific

Therefore, the Chancery Court affirmed a bedrock principle of Delaware Law: the power granted to directors in Section 141 of the DGCL6 to manage the “business and affairs of every corporation” is limited by and subject to the rights possessed by shareholders as the owners of corporations. Where shareholders are silent, director action must be conducted in accordance with their fiduciary duties to shareholders. However, where shareholders exercise their rights consistent with Delaware law, the so-called discretion of the board must yield. When the shareholders have spoken, directors have a duty to obey; they cannot hide behind their status as a fiduciary to ignore shareholders.

http://www.gelaw.com/articles/ART_003A_chancery_court.pdf