apparently it calculates some formula with your max health, combined with the block strength, and if a shield has it like the serpent shield a damage reduction vs a damage type. Problem is how exactly max health affects it i have no idea on. It's also possible early game shields were made worse with some kind of shenanigans, as my late game characters received a max of 2 damage through a black metal shield from a Golems smash, with only about 70 health.