In our November 15, 2016, blog post, "
Cybersecurity liability: Delaware has good news for
directors," we discussed an influential case that, while
not directly dealing with cybersecurity, outlined the duty of
oversight that directors of public and private Delaware
corporations owe with regard to legal compliance risks like
cybersecurity.
Just two weeks later, a federal court issued an order that made
the connection crystal clear. And while in this instance the court
sided with the directors, it makes our
key takeaways from that previous post all the more
prescient.
In In re The Home Depot, Inc. Shareholder Derivative
Litigation, No. 1:15-CV-2999-TWT, the U.S. District Court for
the Northern District of Georgia addressed claims that Home
Depot's directors failed to exercise proper oversight of the
company's network security, which ultimately led to a massive
hack involving the financial information of 56 million Home Depot
customers. By
order dated November
