In my most recent column for the publication of the National Association of Corporate Directors, I discussed a recent Delaware Court of Chancery decision that addressed the fiduciary duty of directors to provide oversight, and what must be alleged with particularity in order to survive a motion to dismiss. Members of the Delaware bench have described a claim for violation of this duty, sometimes referred to as the Caremark duty, to be one of the most challenging claims in Delaware corporate litigation to prevail on. The name of the case is Reiter v. Fairbank, and it was previously highlighted on these pages.

Supplement: Prof. Stephen Bainbridge, venerable corporate law scholar and friend of the blog, quotes from my article in the context of his larger discussion about what qualifies as a “red flag” for purposes of the Caremark oversight duties of a board.