Duty of Oversight

Subscribe to Duty of Oversight via RSS

One of the most urgent current issues in the D&O insurance marketplace is the question of how artificial intelligence (AI) will impact the D&O liability and insurance landscape. In order to get a sense of the industry’s current thinking on AI-related issues, The D&O Diary, in collaboration with Allianz Commercial, recently prepared and distributed a survey seeking readers’ views on several AI-related topics.

The survey drew 250 responses from industry professionals located in the United States, Germany, the United Kingdom, Canada, and 21 other countries. The strong response provides a detailed picture of how the insurance industry views this new and challenging technological frontier.

Continue Reading Industry Survey Results: AI’s Impact on D&O Liability and Insurance

As we have detailed in numerous posts on this site, Artificial Intelligence (AI) is an important area of emerging corporate risk. AI also represents an important corporate governance challenge for companies and their boards. In the following guest post, Patrick Meson takes a detailed look at the nature of AI-related corporate risks and considers the corporate governance implications. Patrick is a Corporate Counsel at a New York Investment Bank. Our thanks to Patrick for allowing us to publish his article on this site. Here is Patrick’s article.

Continue Reading Guest Post: AI Governance Is a Fiduciary Duty

Delaware courts recently have wrestled with the question whether and when underlying allegations of sexual harassment can support a breach of fiduciary duty claim against corporate boards. Indeed, late last year, in the Credit Glory case, at least one Delaware Chancery Court decision rejected the viability of this type of claim. Now, in the latest case addressing these questions, and involving shocking underlying allegations of drugging, sexual assault, and rape at company events, a Delaware Chancery Court sustained a breach of the duty of oversight claim against directors alleged to have covered up the underlying allegations and retaliated against a whistleblower. The court’s detailed opinion is written in obvious anticipation of Supreme Court review. The January 16, 2026, opinion in the eXp World Holdings case can be found here.

Continue Reading Del. Court: Board Failed to Respond to Sexual Misconduct “Red Flags”
Sarah Abrams

In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, explores the extent to which underwriting risks and even claims exposures can arise when a company founder or former executive publicly criticizes his or her former company. I would like to thank Sarah for allowing me to publish her article at a guest post on this site. Here is Sarah’s article.

Continue Reading Guest Post: Founder Fights
Sarah Abrams

In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, takes a closer look at the civil and criminal litigation filed against casual dining company Fat Brands and considers the implication of the litigation for Sides A and B coverage under a D&O insurance policy. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.

Continue Reading Guest Post: Fat Chance
Nir Kossovsky

In the following guest post, Nir Kossovksy examines the issue of corporate governance for reputational risk, through the lens of the recently settled Meta derivative suit. Nir is the CEO of Steel City Re. I would like to thank Nir for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Nir’s article.

Continue Reading Guest Post: Meta Derivative Litigation Hits Reputation Risk Governance
Burkhard Fassbach

The increasing prevalence of artificial intelligence (AI) tools and processes present companies with a host of opportunities and risks. These opportunities and risks in turn create challenges for corporate boards as they try to navigate the changing environment. In the following guest post, Burkhard Fassbach, considers the corporate governance implications AI presents for companies and their boards. Burkhard is a D&O lawyer in private practice in Germany. I would like to thank Burkhard for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Burkhard’s article.

Continue Reading Guest Post: Navigating AI Governance

In the immediate aftermath of the Delaware Supreme Court’s 2019 decision in Marchand v. Barnhill, which revitalized so-called Caremark claims for breach of the duty of oversight, one question I was asked was whether claimants might seek to assert breach of the duty of oversight claims in the context of cybersecurity and data privacy issues. Claimants did, in fact, subsequently raise Caremark claims in connection with the high-profile date breaches at Marriott and SolarWinds, but in each case, the Delaware Chancery Court granted the defendants’ motions to dismiss (as discussed here and here, respectively), raising questions about the viability of duty of oversight claims in the cybersecurity context.

Notwithstanding the less than promising track record for these kinds of claims, in a recent article, NYU Law Professor Jennifer Arlen argues that cybersecurity-related claims for breach of the duty of oversight should support Caremark liability in at least one class of cases – that is, cases relating to companies for whom cybersecurity is a “mission critical legal risk” and in which it is alleged that the company had inadequate cybersecurity that risked (and later caused) substantial harm to businesses and government agency customers, and that the company had misled the customers through statements that were designed to defraud the customers into believing that the company’s cybersecurity systems were materially better than they were. Professor Arlen’s March 18, 2025, post on the Harvard Law School Forum on Corporate Governance about Caremark claims in the cybersecurity context can be found here.

Continue Reading Cybersecurity and the Duty of Oversight
John McCarrick

Readers of this blog have no doubt followed both the recent ongoing controversy over whether companies should leave Delaware for supposedly friendlier jurisdictions as well as the legislation recently introduced in the state’s General Assembly to try to address some of the legal concerns behind the leaving Delaware initiative. In the following guest post, and in the context of these issues, John McCarrick, a partner at the Robinson & Cole law firm in New York, takes a look at recurring Delaware issues that in his view are of significant concern to D&O insurers. I would like to thank John for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is John’s article.

Continue Reading Guest Post: DExit Drama and D&O Insurance Issues
Tim J. Leech

Recent case law developments in Delaware’s courts underscore the importance for corporate boards to monitor “mission critical” operations at their companies. These developments have important corporate governance implications, as I detailed in a September blog post (here). In the following guest post, Tim J. Leach, FCPA FCA Managing Director Risk Oversight Solutions Inc. takes a deeper look at the corporate governance implications from the recent duty of oversight/duty to monitor case law. I would like to thank Tim for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Tim’s article.

Continue Reading Guest Post: “Mission Critical”: Director Liability Ticking Time Bomb