Compliance into the Weeds - McDonald’s and Duty of Corporate Officer Oversight
The decision articulates the standard for plaintiffs asserting derivative claims based on an alleged failure of oversight by directors and officers of California companies. Nearly three decades ago in the seminal case In...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 the landmark case In re Caremark International Inc. Derivative Litigation (1996), the Delaware Court of Chancery clarified the standard of liability for oversight failures by directors. Specifically, the Delaware Court of...more
In former Chancellor Allen’s hallmark decision in In re Caremark International, Inc. Derivative Litigation, the Delaware Court of Chancery held that directors of a corporation owe stockholders the fiduciary duty of oversight....more
Last year, we discussed how stockholder complaints concerning environmental, social, and governance (“ESG”) issues were making their way to the courtroom and, specifically, how the Delaware Court of Chancery and Supreme...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
On January 25, 2023, the Delaware Chancery Court issued its ruling in In re McDonald’s Corporation Stockholder Derivative Litigation, C.A. No. 2021-0324-JTL (Del. Ch. Jan. 26, 2023), holding for the first time that a...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
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