A judge’s decision to allow a shareholder lawsuit against a former McDonald’s Corp. human resources chief has put corporate executives on alert that they can be held personally liable for failing to oversee the biggest risks confronted by their companies.
The ruling follows a series of Delaware Court of Chancery decisions that have set off alarm bells in corporate boardrooms by making clear that directors can be sued for serious compliance failures. The latest decision by Vice Chancellor J. Travis Laster clarifies that the legal scrutiny doesn’t stop with the board. Corporate officers can also be held to account for failing to do their part, the judge ruled.
Source: McDonald’s Ruling Shifts Oversight Liability Focus to Corporate Officers – WSJ
