To fulfill their fiduciary duties to oversee and properly manage a corporation governed by the Delaware General Corporation Law (DGCL), directors have broad rights to the company's privileged and confidential information. Delaware courts have explained that directors are treated as joint clients with the company, and thus, share the company's privilege to legal advice provided to the company through its officers or directors, including if necessary to perform their fiduciary duties, privileged communications that occurred before such directors joined the board.

In turn, under a long line of Delaware cases dating back to 1992, a director may share a corporation's privileged communications with the stockholder designating the director to the board under certain limited circumstances: first, when a stockholder has the right to designate a director to the board by contract or its stockholder voting power; or second, when a director serves as a controller or fiduciary of the stockholder. Delaware courts have reasoned that when a director serves as the stockholder's designee to the board, that director acts as the stockholder's representative to the board, and the stockholder is therefore, generally entitled to the same privileged or confidential information of the company as the director. If the director serves as a controller or fiduciary of the stockholder, Delaware courts reason that it is unrealistic and impractical that company information shared with the director could be segregated from the director's thought process in fulfilling their dual-fiduciary duties to both the company and the stockholder. This rationale has been described as the "one-brain" theory because the director is unable to split his or her brain between the dual-fiduciary duties owed as a director of the company and as a fiduciary or controller of the stockholder. But even if the director is entitled to share the company's privileged or confidential information with a designating stockholder, that entitlement does not give the stockholder the freedom or unfettered right to further disclose or use the information in whatever manner the stockholder sees fit.