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	<title>The Harvard Law School Forum on Corporate Governance</title>
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	<title>Splitting Caremark&#8217;s Atom &#8211; The Harvard Law School Forum on Corporate Governance</title>
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		<title>Splitting Caremark&#8217;s Atom</title>
		<link>https://corpgov.law.harvard.edu/2026/08/24/splitting-caremarks-atom/?utm_source=rss&#038;utm_medium=rss&#038;utm_campaign=splitting-caremarks-atom</link>
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		<pubDate>Mon, 24 Aug 2026 11:31:34 +0000</pubDate>
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				<category><![CDATA[Academic Research]]></category>
		<category><![CDATA[Delaware Law Series]]></category>
		<category><![CDATA[Agency costs]]></category>
		<category><![CDATA[Board monitoring]]></category>
		<category><![CDATA[Caremark]]></category>
		<category><![CDATA[Corporate compliance]]></category>
		<category><![CDATA[delaware]]></category>
		<category><![CDATA[Delaware law]]></category>
		<category><![CDATA[duty of obedience]]></category>
		<category><![CDATA[Duty of oversight]]></category>
		<category><![CDATA[Public enforcement]]></category>

		<guid isPermaLink="false">https://corpgov.law.harvard.edu/?p=183285?d=20260824114722EDT</guid>
		<description><![CDATA[In December 2025, Vice Chancellor Will dismissed a derivative claim against a director whose sexual harassment of employees had produced roughly $1.6 million in liability for the corporation. Such “interpersonal” conduct, she held in Brola v. Lundgren, was “not a matter of corporate internal affairs,” and “[t]he legal system provided a remedy for his wrongdoing [&#8230;]]]></description>
				<content:encoded><![CDATA[<hgroup><em>Posted by Ryan Bubb (USC) and Gabriel Cohen (U.S. District Court, Eastern District of PA), on Monday, August 24, 2026 </em><div class='e_n' style='background:#F8F8F8;padding:10px;margin-top:5px;margin-bottom:10px;text-indent:2.5em;'><strong style='margin-left:-2.5em;'>Editor's Note: </strong> <p style="margin:0; display:inline;"><a href="https://gould.usc.edu/faculty/profile/ryan-bubb/">Ryan Bubb</a> is a Professor of Law and the Director of Strategic Initiatives at the USC Gould School of Law, and Gabriel Cohen is a Law Clerk on the U.S. District Court for the Eastern District of Pennsylvania and will join Bernstein Litowitz Berger &amp; Grossmann LLP in the fall. This post is based on their recent <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=7244178">paper</a> and is part of the <a href="https://corpgov.law.harvard.edu/category/delaware-law-series/">Delaware Law Series</a>; links to other posts in the series are available <a href="https://corpgov.law.harvard.edu/category/delaware-law-series/">here</a>.</p>
</div></hgroup><p>In December 2025, Vice Chancellor Will dismissed a derivative claim against a director whose sexual harassment of employees had produced roughly $1.6 million in liability for the corporation. Such “interpersonal” conduct, she held in <em><a href="https://law.justia.com/cases/delaware/court-of-chancery/2025/2024-1108-lww.html">Brola v. Lundgren</a></em>, was “not a matter of corporate internal affairs,” and “[t]he legal system provided a remedy for his wrongdoing through New York’s employment laws.” She warned against turning the duty of loyalty into “a general morality code” and inviting “doctrinal sprawl” that would reach “a breakroom fistfight, a defamatory social media post, or theft of office supplies.”</p>
<p> <a href="https://corpgov.law.harvard.edu/2026/08/24/splitting-caremarks-atom/#more-183285" class="more-link"><span aria-label="Continue reading Splitting Caremark&#8217;s Atom">(more&hellip;)</span></a></p>
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