Almost one year ago, Chancellor Kathaleen St. J. McCormick ruled that a board of directors of a Delaware corporation must at a "bare minimum" approve an "essentially complete" version of the merger agreement.  Sjunde AP-Fonden v. Activision Blizzard, Inc., 2024 WL 863290 (Del. Ch. Feb. 29, 2024). See What Exactly Must A Board Approve When It Approves A Merger?

Within months, the Delaware legislature responded by adding Section 147 to the Delaware General Corporation Law. That statute establishes a final or "substantially final" standard for board approval (emphasis added):

Whenever this chapter expressly requires the board of directors to approve or take other action with respect to any agreement, instrument or document, such agreement, instrument or document may be approved by the board of directors in final form or in substantially final form. If the board of directors shall have acted to approve or take other action with respect to an agreement, instrument or document that is required by this chapter to be filed with the Secretary of State or referenced in any certificate so filed, the board of directors may, at any time after providing such approval or taking such other action and prior to the effectiveness of such filing with the Secretary of State, adopt a resolution ratifying the agreement, instrument or document. A ratification under this section shall be deemed to be effective as of the time of the original approval or other action by the board of directors and to satisfy any requirement under this chapter that the board of directors approve or take other action with respect to such agreement, instrument or document in a specific manner or sequence. Ratification under this section shall not be deemed to be the exclusive means of ratifying an agreement, instrument or document approved by the board of directors pursuant to this section, but shall be in addition to any ratification or validation that may be available under §§ 204 and 205 of this title or under the common law.

Now, the Nevada legislature ins considering adoption of a seemingly looser standard (emphasis added):

Whenever this title expressly requires the board of directors to approve or take other action with respect to any agreement, instrument, certificate or other document, including, without limitation, any agreement, instrument, certificate or other document required to be filed with the Secretary of State, the directors may approve, adopt or otherwise act upon such agreement, instrument, certificate or other document in final form or such preliminary form as the directors deem appropriate in their business judgment.  

AB 239. I have not found any Delaware cases that apply the "substantially final" standard. However, this standard would appear to require the court to compare the final form of a document with the form approved by the board. That comparison would identify any differences, but the court would still need to answer the question of whether those differences are "substantial". This approach is consistent with Delaware's general approach to corporate law as it invites litigation over the meaning of "substantially". Invariably, the result will be a mountain of fact-specific and nuanced decisions from the courts.

Nevada's standard in contrast would defer to the directors' business judgment. Presumably, that would allow directors to approve a preliminary form of a document or agreement even when the final form differs substantially from the form approved by the directors. Nevada's proposed standard is much less likely to foment litigation because plaintiffs will have to overcome the much more difficult hurdle of establishing that the approval of a preliminary form was not a proper exercise of the board's business judgment.