In the United States, corporate directors and, as confirmed by the Delaware Court in McDonald s Corp. Stockholder Derivative Litigation McDonald1, corporate officers owe, as a subset of their duty of loyalty, a duty to monitor and oversee the operations of a company. This duty of oversight is often referred to as the “Caremark” duty, named after the 1996 case establishing its parameters.2 A party seeking to bring a Caremark claim against a director and/or officer “must allege sufficient facts to support a reasonable inference that the fiduciary acted in bad faith.”3
In the United States, corporate directors owe, as a subset of their duty of loyalty, a duty to monitor and oversee the operations of the company, referred to as the duty of oversight in this blog. This duty is known as the Caremark duty, named after the 1996 case establishing its parameters.