Caremark’s Behavioral Legacy
Volume 90, No. 4, Summer 2018
By Todd Haugh [PDF]

In re Caremark International Inc. Derivative Litigation has always been somewhat of a mystery to me. If you are not familiar with Caremark, few cases loom larger in the realm of corporate governance. The reason is that the opinion’s articulation of the standards for holding board members liable for failing to properly monitor the corporation “transformed Delaware law” by significantly expanding the responsibilities of corporate directors. Penned by legendary Delaware Chancery Court judge William T. Allen, Caremark is considered by some to be “the seminal modern case on directors’ liability for failure to act.”

Todd Haugh is an Assistant Professor of Business Law and Ethics at Indiana University, Kelley School of Business.