Episode 114 — Update on Board Member Liability for Compliance Oversight Failures
Corporate board members have an obligation to oversee and monitor a company’s compliance program. In two recent cases, Delaware courts have tightened the standard governing board liability under the Caremark decision. Several months ago, in a case involving the Blue Bell Ice Cream listeria outbreak, the Delaware Supreme Court applied a heightened standard when relating to “mission-critical” issues involving food safety to a food company. In another decision, on October 1, 2019, in Clovis Pharmaceuticals, a Delaware Court denied a motion to dismiss a complaint finding that a board’s failure to react to red flags concerning a clinical trial protocol satisfied the Caremark standard.
In this Episode, Mike Volkov discusses these two important cases and board member liability under Caremark.