As readers of this blog know, there have been important case law developments in Delaware concerning boards’ duty of oversight. In the following guest post, the authors review the key recent developments and consider the practical implications for boards. The authors of this paper are: Sebastian M. Alia, Deputy General Counsel, Hudson Insurance Group; H. Stephen Grace, Ph.D., President, H.S. Grace & Company, Inc.: Alvin H. Fenichel, CPA, Senior Advisor, H.S. Grace & Company, Inc.; and Joseph P. Monteleone, Esq., Partner, Weber Gallagher. A version of this article previously was published in the ACC Docket. I would like to thank the authors for allowing me to publish their articles on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: How To Structure a Board to Oversee Mission-Critical Activities
Caremark Duties Include Duty Not Only to Establish Oversight Processes but Also to Monitor Them
Earlier this year, in Marchand v. Barnhill, the Delaware Supreme Court underscored that boards that fail to establish oversight procedures for their company’s mission critical functions can be held liable for breach of their Caremark duties. In an October 1, 2019 decision in the Clovis Oncology Derivative Litigation, the Delaware Chancery Court provided further perspective on directors’ potential liability for breaches of the duty of oversight. The Chancery court held, citing Marchand, that boards not only must be able to show that they have made good faith efforts to implement an oversight system, but that also that they monitor the system – particularly when a company operates in a highly regulated industry. The Chancery Court’s October 1, 2019 decision in the Clovis Oncology Derivative Litigation can be found here.
Continue Reading Caremark Duties Include Duty Not Only to Establish Oversight Processes but Also to Monitor Them
U.S. Supreme Court: ERISA Plan Fiduciaries Have Continuing Duty to Monitor Investments
ERISA plan fiduciaries have a continuing duty to monitor selected plan investments and to remove imprudent investment selections, according to the U.S. Supreme Court’s unanimous May 18, 2015 opinion in Tibble v. Edison International. Although the Court affirmed the fiduciary duty to monitor, it otherwise left the development of the duty’s contours to be delineated