Tagged: Caremark standard

Corporate Board Liability Risks Increase as Delaware Courts’ Reject Caremark Dismissal Claims

Corporate boards will continue to face higher risks of liability.  As the last bastion of legal privilege and protection, the wall of protection is crumbling bit by bit.  Eventually, corporate stakeholders will demand that board members improve performance.  At the core of board member protection from liability is the well-known Caremark doctrine that requires corporate boards to make a good faith effort to implement a...

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...