Under the Delaware Chancery Court decision in the Caremark case, directors can be liable for failures in their oversight duties – that is, their duties to monitor the company and its functions. Lawsuits alleging a violation of the duty of oversight are notoriously challenging for plaintiffs. However, in the recent Marchand v. Barnhill case, the Delaware Supreme Court reversed the Chancery Court’s dismissal of a Caremark liability case and allowed the case to proceed against the board of an ice cream manufacturer that experienced a deadly listeria outbreak. Caremark liability cases remain difficult to plead and prove, but the Marchand decision nevertheless has important implications for director liability for breaches of their duty of oversight.
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In the current global economy, many companies have operations and assets in far-flung corners of the world. These geographically dispersed arrangements have a number of implications for the concerned companies. According to a recent decision from the Delaware Court of Chancery, the arrangements may also have important implications of these companies’ outside directors, at least