Delaware Chancery Court Clarifies Delaware Boards' Fiduciary Oversight Duties as to Corporate Operations Abroad

Article
Kevin R. Shannon and Christopher N. Kelly
Bloomberg BNA Corporate Governance Report

In 2013, the Delaware Court of Chancery issued three decisions in which it denied motions to dismiss claims for breach of the duty of oversight (i.e., Caremark claims) asserted against directors of Delaware corporations having significant operations in China. In each case, the court found that sufficient facts were pled against the defendant directors to support a finding that they acted in bad faith by consciously disregarding their oversight duties.

The decisions serve as cautionary tales to boards of directors that they may face personal liability for the damages suffered by the corporation if they do not actively monitor its foreign assets and operations. These decisions also provide directors with helpful insight into how they can satisfy their fiduciary oversight duties in such situations.

Related Professionals

Media Contact

Lisa Altman, Jaffe PR, Senior Vice President


About Potter Anderson

Potter Anderson & Corroon LLP is one of the largest and most highly regarded Delaware law firms, providing legal services to regional, national, and international clients. With more than 100 attorneys, the firm’s practice is centered on corporate law, corporate litigation, intellectual property, commercial litigation, bankruptcy, labor and employment, and real estate.

Jump to Page

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. You may disable these by changing your browser settings, but this may affect how the website functions.

Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.