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.

Read the full article from NYSE Governance Series: Hot Topics in Board Governance.

Both “deal” and “governance” counsel will enjoy sharing with corporate clients the highly practical guidance provided by Chief Justice Leo E. Strine, Jr. in a newly published article in The Business Lawyer. In his article, the Chief Justice identifies several actions lawyers can recommend to improve the process by which boards review merger/acquisition proposals. These include promoting more effective decision making, mitigating the potential for conflicts of interest and more accurately recording the exercise of board judgment – all for the purpose of reducing transaction exposure to future litigation challenge. More broadly, these recommendations serve to underscore the various critical elements that support informed board decision-making and sustainable transactions.

Read the full article from The CLS Blue Sky Blog.

Health care general counsel should review and brief their internal clients on the new Practical Guidance for Health Care Governing Boards on Compliance Oversight (Guidance), released on April 20, 2015.  A joint effort by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS), the Association of Healthcare Internal Auditors, the American Health Lawyers Association (AHLA) and the Health Care Compliance Association, the Guidance is a useful and timely resource for both the general counsel and the board.

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In her recent “Compliance Strategist” column, the well-respected and knowledgeable Donna Boehme describes as “fatally flawed” a relationship in which the compliance officer reports, for hierarchy purposes, to the general counsel. She presents this model (Compliance 1.0) as antithetical to effective compliance programs, the byproduct of the self-interested, and suggests that those organizations that continue to apply such a model are “ridiculous.” She argues, in essence, that the only acceptable model is one in which “compliance is freed from the legal department” (e.g., Compliance 2.0).

I don’t agree. There’s another perspective—one less extreme in its approach, one that is less corrosive to the compliance officer-general counsel relationship, one that accurately represents the totality of recent developments. Simply, the answer is just not as black and white as Boehme’s column contends, and I think it is misleading to suggest otherwise.

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