Caremark and Compliance: A Twenty Year Lookback
17 Pages Posted: 12 Mar 2018 Last revised: 23 Sep 2018
Date Written: 2018
The Delaware Chancery Court’s decision in In re Caremark was and is a landmark decision. This brief Commentary takes a look back at Caremark on three issues that pertain to its contemporary relevance inside the corporate boardroom: (1) framing the cost-benefit assessment on the question of how much to spend on compliance; (2) how and when to force certain compliance matters to real-time board-level attention; and (3) using selection, promotion, and compensation decisions to influence the culture and risk-taking “temperature” of the firm.
Keywords: compliance, corporate crime, boards of directors
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