From Director Liability to Officer Liability to ESG Caremark Claims: A Natural Evolution?

Authors

Gareth McHugh

Abstract

With the McDonald’s decision, officers and directors could face Caremark liability for the first time, and this decision could also lead to an influx of ESG-based Caremark claims in Delaware Courts. This Comment explains that, while ESG Caremark claims would force corporations to adopt ESG oversight systems to avoid liability, the very political, social, and legal environment that created a growing call for ESG Caremark claims presents a beneficial opportunity for corporations to appeal to consumers and investors by proactively adopting ESG oversight systems. Corporations are at a nexus where they can either willingly adopt ESG oversight systems and reap the benefits or wait until the courts or the government force their hand, miss the opportunity, and simultaneously face fines.

Recommended Citation

Gareth McHugh, From Director Liability to Officer Liability to ESG Caremark Claims: A Natural Evolution?, 10 Emory Corp. Governance & Accountability Rev. 249 (2023).
Available at: https://scholarlycommons.law.emory.edu/ecgar/vol10/iss2/8