Earlier this month, the Delaware Court of Chancery denied defendant directors’ motion to dismiss a duty-of-oversight claim brought by plaintiff shareholders in In re Clovis Oncology, Inc. Derivative Litigation. This decision, together with a similar June 2019 ruling by the Delaware Supreme Court in Marchand v. Barnhill, confirms the prospect of liability for corporate directors who do not work hard enough to establish and monitor effective risk-management procedures at their companies. The two rulings therefore deliver timely lessons regarding directors’ duty of oversight under Delaware’s Caremark standard. The rulings are especially important for directors of companies whose business hinges on the success of a “mission critical” product in a regulated industry.
In this piece published by Columbia Law School's Blog on Corporations and the Capital Markets (The CLS Blue Sky Blog), members of the RK&O Board & Director Advisory Group address these rulings and provide key takeaways for Directors.
"Richards Kibbe & Orbe Discusses Delaware Rulings on Boards’ Duty of Oversight" - The CLS Blue Sky Blog