An important new decision, In Re General Motors Company Derivative Litigation, decided by the Delaware Chancery Court on June 26, provides useful guidance on the board’s obligation to both assess corporate risks, and to act to prevent loss. On the one hand, the decision confirms the high burden of proof necessary to establish a derivative claim for breach of the board’s risk management duties. At the same time, it also highlights the type of conduct to which boards may strive in order to maintain effective risk oversight protocols. This may be particularly valuable for corporate boards operating in industries with complex risk and regulatory environments.
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