Caremark

A Theory of Corporate Bad Faith

By Robert J. Rhee October 15, 2026 by renholding

There are four forms of corporate bad faith: intentional misconduct, knowing violation of law (Massey), violation of the duty of oversight (Caremark), and corporate waste. Each is a distinct theory of the case in a cause …

How Caremark Has Become Oversized

By Yehonatan Shiman September 2, 2026 by renholding

On July 16, 2025, for perhaps the first time in the history of Delaware corporate law, a Caremark claim involving a public company director went to trial. Meta stockholders brought an $8 billion claim against the company’s directors and officers, …

How Fiduciary Duty May Change in the Age of Quantum AI

By Michael R. Siebecker May 11, 2026 by renholding

What should fiduciary duty require when new technology allows corporate directors to see risk more clearly? Though corporate law has long assumed that directors must make decisions under conditions of uncertainty, artificial intelligence and emerging quantum-computing tools may change what …

Self-Binding Corporations

By Dhruv Aggarwal April 15, 2026 by renholding

The charters for Boeing and Google, two of the largest corporations in history, run just seven and eleven pages long, respectively. These charters say almost nothing about the nature of the company’s business and do not contain policies on business …

Sidley Discusses a Unique Caremark Twist Amidst Bankruptcy

By Alex J. Kaplan February 17, 2026 by renholding

A recent decision by the Delaware Court of Chancery in Giuliano v. Grenfell-Gardner, et al. involves a notable twist on the familiar Caremark line of oversight liability cases. After the subject company went into bankruptcy, a bankruptcy trustee gained access …

What Should Caremark Encompass?

By Claire A. Hill January 6, 2026 by renholding

Under In re Caremark Int’l Inc. Derivative Litig., directors can be liable for failing to adequately oversee corporate compliance. While Caremark has famously been described as “the most difficult theory in corporation law upon which a plaintiff might hope …

The Global Issues Corporate Boards Must Face Right Now

By Christian Bühring-Uhle and Frederik Otto September 16, 2025 by renholding

The growing body of governance literature offers no shortage of views on what boards ought to concern themselves with beyond the routine fare of overseeing management and discussing strategy and finances. Depending on the perspective of the author, topics range …

How to Promote Accountability for Flawed Corporate Culture

By Jennifer G. Hill and Roy Shapira August 19, 2025 by renholding

Corporate culture matters. A flawed culture can lead to disaster even when a company boasts an elaborate compliance program. Yet scholars and practitioners still know surprisingly little about what legal mechanisms can generate accountability for corporate culture gone wrong.

In …

How the EU Sustainability Mandate’s Impact on U.S. Companies Is Evolving

By Luca Enriques, Matteo Gatti and Roy Shapira May 15, 2025 by renholding

In a recent paper, we examine how the EU Corporate Sustainability Due Diligence Directive (CS3D) could reshape the behavior of American corporations. The CS3D holds large corporations legally accountable for how they protect human rights and the environment throughout …

The Legitimation of Shareholder Primacy

By Ann M. Lipton February 27, 2025 by renholding

We are living in a particularly polarized era, and corporate governance is no exception.  The divisions have threatened to spill over to Delaware, the preferred jurisdiction for incorporation in the United States, with several high-profile cases calling the state’s neutrality …

Delaware Vice Chancellor Travis Laster Says Bill Barr Could Use Some Help on Delaware Law

By J. Travis Laster December 7, 2023 by renholding

The universe regularly provides reminders to remain humble, including reminders that having expertise in one area does not make you an expert in adjacent areas. Former Attorney General Bill Barr recently provided one of those reminders with his opinion column

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To Whom Are Caremark Duties Owed?

By Ann M. Lipton October 3, 2023 by renholding

A while ago, the National Center for Public Policy Research – a conservative organization that focuses its advocacy in the corporate and securities space – filed a lawsuit against Starbucks, arguing that its diversity equity and inclusion program ran

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Substance and Process in Corporate Law

By James An September 12, 2023 by renholding

Corporate law – and judicial application of that law – considers two facets of a transaction: (1) whether a corporation’s management used processes that are fair to stockholders to reach its decision (“process”), and (2) whether the economic results of …

Compliance’s Next Challenge: Polarization

By Miriam H. Baer September 7, 2023 by renholding

Last year marked the 20^th anniversary of Congress’ enactment of the Sarbanes-Oxley Act, legislation that arose in response to Enron’s demise and the accounting scandals that followed, and which coincided with the successful and much-heralded prosecution of a …

The New Corporate Law of Corporate Groups

By Mariana Pargendler May 22, 2023 by renholding

Large firms today are rarely organized as a single legal entity, but rather as corporate groups with numerous subsidiaries that have separate legal personalities. A debate has long raged over how to treat the legal boundaries between companies belonging to …

Operational Risk and the New Caremark Liability for Boards of Directors

By Robert C. Bird and Julie Manning Magid March 30, 2023 by renholding

In a new article, we identify a subtle and unrecognized shift in Caremark[1] cases that changes how the Caremark doctrine actually works. Caremark claims, which accuse corporate directors of breaching the fiduciary duty of loyalty by not making a …

Mayer Brown Discusses Five Steps for Directors to Consider About Risk Governance

By Matt Bisanz, Andrew Noreuil, Jodi Simala, Bill Kucera and Megan Webster February 7, 2023 by renholding

Historically, directors have been protected from personal liability in connection with risk management by the high standard set in the seminal 1996 Caremark[1]case. In recent years, however, courts have held that certain plaintiffs have pled facts sufficient to …

Debevoise & Plimpton Discusses Delaware Chancery Decision Allowing Caremark Claim Against an Officer

By Susan Reagan Gittes, Gregory V. Gooding, Elliot Greenfield, Maeve O'Connor and William D. Regner January 31, 2023 by renholding

In a January 25, 2023 decision (In Re McDonald’s Corp. S’Holder Litig., C.A. No. 2021-0324-JTL (Del. Ch. Jan. 25, 2023)), the Delaware Court of Chancery declined to dismiss claims that a corporate officer, who led the company’s human …

How Directors’ Oversight Duties and Liability under Caremark Are Evolving

By Jennifer Arlen October 13, 2022 by renholding

Corporate law prohibits companies from pursuing profits through criminal misconduct. It uses the fiduciary duties imposed on boards under the Caremark doctrine,[1] and the threat of personal liability of directors for deliberate breach, to help motivate directors to make …

Sullivan & Cromwell Discusses Delaware Decision on Caremark Liability for Cybersecurity Failure

By Nicole Friedlander, Tony Lewis, Bob Downes, Brian Frawley and John Hardiman September 27, 2022 by renholding

On September 6, 2022, in Construction Industry Laborers Pension Fund on behalf of SolarWinds Corporation, et al. v. Mike Bingle, et al. (“SolarWinds”),[1] the Delaware Chancery Court granted a motion to dismiss a derivative suit against directors …