Milbank LLP Litigation & Arbitration partners Alan Stone and Jed Schwartz, Corporate partners Neil Whoriskey and Iliana Ongun, Litigation & Arbitration associate Gary Crosby, and Corporate associate Frank Pensabene authored an article titled “Corporate Officers Owe the Same Caremark Oversight Duties as Directors” for the Harvard Law School Forum on Corporate Governance, a leading online resource for corporate governance issues.
For the past several years, boards of directors have increasingly faced claims that they have failed in their duty of oversight. These so-called Caremark claims can arise in a number of contexts involving allegations of systemic failures or intentional wrongdoing. Recently, the Delaware Court of Chancery held for the first time that officers owe the same duty of oversight as directors, an expansion of Caremark which had previously only been applied to directors. In In re McDonald’s Corp. Stockholder Derivative Litigation, the Delaware Court of Chancery denied a motion to dismiss a breach of fiduciary duty claim against the former Executive Vice President and Global Chief People Officer of McDonald’s Corporation relating to alleged sexual misconduct and inadequate oversight. The article discusses what impact this recent decision could have on companies and officers moving forward.
Click here to read “Corporate Officers Owe the Same Caremark Oversight Duties as Directors.”
