Overseeing Cybersecurity Risk: Confirmation of Officer Oversight Duties Could Mean Increased Personal Risk for Data Privacy and Cybersecurity Breaches
March 9, 2023
Publication| Corporate & Chancery Litigation| Corporate Governance| Mergers & Acquisitions| Corporate Transactions
The fiduciary duty of oversight has been one of the hottest topics of discussion among practitioners and boards of directors since it was thrust back into the limelight by the Delaware Supreme Court’s decision in Marchand v. Barnhill. In Marchand, the Delaware Supreme Court reversed a decision by the Delaware Court of Chancery to dismiss, among other things, a claim for breach of the duty of oversight—known as a Caremark claim—against the directors of Blue Bell Creameries, reasoning that a successfully pled oversight claim should not be “a chimera.” Since Marchand in 2019, multiple plaintiffs have successfully overcome motions to dismiss filed by directors pursuant to oversight theories.