Last year, the Delaware Court of Chancery confirmed that corporate officers—not just directors—have a fiduciary duty of oversight in In re McDonald’s Corp. S’holder Deriv. Litig., 289 A.3rd 343 (Del. Ch. 2023). In Segway Inc. v. Cai, C.A. No 2022-1110-LWW (Del. Ch. 2023)—a decision that should give some comfort to corporate officers—the
Sean Knowles focuses his practice on securities litigation, corporate governance matters and white collar investigations and defense.
It is increasingly difficult for companies to steer clear of contentious social or political issues on which their shareholders may have passionately conflicting opinions. The Delaware Chancery Court recently highlighted the steps that a board can take to protect its decisions on potentially divisive issues, re-affirming the board’s “significant discretion to guide corporate strategy—including on…
Delaware courts have been leaders in articulating the oversight duties of corporate directors, most famously in In re Caremark International Inc. Derivative Litigation, 698 A. 2d 959 (Del. Ch. 1996). The court, in Caremark, held that directors breach their duty of oversight when they do either or both of the following:
- Fail to make