Delaware Court of Chancery Holds for the First Time that Corporate Officers Owe a Duty of Oversight

Sullivan & Cromwell LLP - February 1, 2023
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On January 26, 2023, the Delaware Court of Chancery in In re McDonald’s Corp. Stockholder Derivative Litigation declined to dismiss a derivative breach of fiduciary duty claim against a corporate officer and for the first time held that corporate officers owe a duty of oversight. The decision touches on a number of topics relevant to Delaware corporations and their boards, including litigation risks for senior officers, considerations for D&O policy renewal, and corporate governance implications.