Do Corporate Officers Owe the Same Duty of Care as Directors?
A recent decision by Delaware's Supreme Court held that officers owe the same fiduciary duty of care as its directors. However, in its decision, the Court did not address the standard of care for determining officer liability.
Traditionally, the standard of care used to evaluate corporate directors has been whether or not the directors' actions are grossly negligent. The fact that the Court was silent as to the standard of care leaves open the possibility that corporate officers could be found liable for acts of simple negligence. It is much easier to prove simple negligence against another party. Therefore a Court (perhaps even Delaware's Supreme Court) will inevitably be forced to answer this question surrounding the standard of the duty of care.
We will continue to provide updates as more details are revealed, so please visit this blog to stay informed.
For more information on issues pertaining to Corporate law, such as formation, compliance and governance, please contact a business attorney with Wood, Atter & Wolf, P.A., with offices in Jacksonville and Ponte Vedra Beach, Florida.
