"Mission Critical" Board Oversight

Boeing decision suggests importance of board oversight over critical risks  and operations in Caremark claims

On September 7, 2021, a Delaware court largely denied The Boeing Company's ("Boeing") motion to dismiss  a stockholder derivative suit against Boeing directors in connection with two crashes of Boeing's 737 MAX  airplane in October 2018 and March 2019. In In re The Boeing Company Derivative Litigation, No. 2019- 0907-MTZ (Del. Ch. Sept. 7, 2021), the plaintiffs alleged, among other things, that Boeing's board of directors  had breached its fiduciary duty of oversight under the standards established in In re Caremark International Inc.  Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996) and Marchand v. Barnhill, 212 A.3d 805 (Del. 2019) by failing  to establish an adequate reporting system for airplane safety and "turning a blind eye to a red flag representing  airplane safety problems". Though noting that Caremark claims are "possibly the most difficult