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ARTICLE · 22 JULY 2021

Recent Developments In Shareholder Derivative Litigation Concerning Diversity In Corporate Leadership

Jones Day
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A number of shareholder derivative lawsuits in federal court have been filed seeking to hold directors and officers of major companies accountable for alleged failures to ...

United StatesCorporate/Commercial Law
Jones Day
Jones Day
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In Short

The Situation: A number of shareholder derivative lawsuits in federal court have been filed seeking to hold directors and officers of major companies accountable for alleged failures to uphold their companies' stated commitment to diversity and inclusion. While additional cases continue to be filed, courts have granted motions to dismiss in several early cases.

The Result: Multiple defendants have won motions to dismiss on the procedural grounds that forum-selection clauses mandate that shareholder derivative claims be brought in the Delaware Court of Chancery. One defendant won a motion to dismiss on substantive grounds because of shortcomings in plaintiff's claims under Section 14(a) of the Securities Exchange Act of 1934 ("Exchange Act").

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