Corporate "toxicity" and officer liability: The lessons of the McDonald's case for corporate compliance

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On January 25, 2023, Vice Chancellor James Travis Laster of the Delaware Court of Chancery handed down an opinion in the case of In Re McDonald’s Corp. Stockholder Derivative Litigation[1] that declared that the oversight duties of corporate officers of Delaware corporations are comparable to the oversight obligations of corporate directors articulated in In re Caremark International Inc. Derivative Litigation.[2] The decision was not on the merits of the allegations, which revolved around an alleged toxic culture of sexual harassment, but was a denial of a motion to dismiss. Nevertheless, the legal reasoning for this holding will undoubtedly generate a great deal of discussion. Rather than flyspecking the legal reasoning, this article will focus on the implications for corporations and the people involved with their compliance programs.

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