Compliance into the Weeds - McDonald’s and Duty of Corporate Officer Oversight
In a case of first impression, the Court of Chancery held recently that officers, like directors, owe their companies a duty of oversight, although the scope of that will vary with their responsibilities. Two other Chancery...more
On January 25, 2023, Vice Chancellor Laster of the Court of Chancery issued a significant decision, finding as a matter of first impression that corporate officers owe a duty of oversight akin to the oversight duties owed by...more
Corporate officers take note: Recent changes to Delaware law introduce a path towards additional protection and new potential liability for corporate officers. First, corporations may now amend their articles of incorporation...more
A claim for breach of the duty of oversight is known as a Caremark claim, after the landmark Delaware Court of Chancery decision in In re Caremark International Inc. Derivative Litigation (1996). Since then, Delaware courts...more
In a recent decision, the Delaware Court of Chancery determined for the first time that corporate officers owe a duty of oversight under Delaware Law. The case, In re McDonald’s Corporation Stockholder Derivative Litigation,...more
In the United States, corporate directors owe, as a subset of their duty of loyalty, a duty to monitor and oversee the operations of the company, referred to as the "duty of oversight" in this blog. This duty is known as the...more
In a significant and far-reaching development in Delaware corporate law, the Delaware Court of Chancery recently held in In re McDonald’s Corporation Stockholder Derivative Litigation, C.A. No. 2021-0324-JTL (Del. Ch. Jan....more
Human Resources Executives and Chief Compliance Officers now face the potential for increased personal liability following a first-of-its-kind decision from a Delaware court, which established the fiduciary duty of oversight...more
Delaware courts have firmly established that directors have oversight duties under the good-faith component of the fiduciary duty of loyalty. In the seminal Caremark decision, the Delaware Court of Chancery held that...more
In In re McDonald’s Corp. Stockholder Derivative Litigation, No. 2021-0324 (Del. Ch. Jan. 26, 2023), the Delaware Court of Chancery (Laster, V.C.) held that officers of a Delaware corporation are subject to a fiduciary duty...more
Alleged workplace misconduct—and the obligation to collect information and report up about it—rears its head again in yet another case, this time involving Activision Blizzard, Inc. Just last month, in In re McDonald’s...more
Corporate officers owe the same fiduciary duty of oversight as directors. Just as with directors, officers fulfill their oversight duty by acting in good faith....more
As the last few years have shown, shareholder derivative litigation — claims brought by a shareholder purportedly on behalf of a company against its board of directors or senior management for alleged breaches of fiduciary...more