Much Ado About a Little Something?: Oversight Duties Extended to Corporate Officers

Joseph P. Monteleone, a partner at Weber Gallagher. Courtesy photo.

Vice Chancellor J. Travis Laster of the Delaware Chancery Court recently issued a lengthy opinion in In Re McDonald’s Corporation Stockholder Derivative Litigation, 2023 Del. Ch. LEXIS 24 (Del. Ch. 2023), a shareholder derivative suit brought against former CEO Stephen J. Easterbrook, former chief people officer David Fairhurst, and other company directors.

The decision was significant because it extended the fiduciary duty of oversight to corporate officers under applicable Delaware law. Originally, through the court’s decision in In re Caremark Int’l Inc. Derivative Litigation, 698 A. 2d 959 (Del. Ch. 1996), that duty was one only imposed on corporate directors. The opinion addressed solely the claims against Fairhurst in deciding a motion to dismiss he had filed. Motions to dismiss were also filed by Easterbrook and the director defendants, but they were not addressed in this decision.