The Duty to Monitor Diversity Training

In t he 2019 case of Marchand v. Barnhill, the Delaware Supreme Court held that Delaware law requires a board to “make a good faith effort to put in place a reasonable system of monitoring and reporting about the corporation’s central compliance risks.” In that case, the central compliance risk related to food safety; the company, Blue Bell, was “one of the country’s largest ice cream manufacturers” and “suffered a listeria outbreak in early 2015.” Other corporate governance experts have argued that cybersecurity may constitute a relevant generally applicable cognizable risk, because “[h]ighly public data breaches have put every corporate director and boardroom on notice” of the risk. To the extent notice of significant risks can trigger a duty of oversight, is there an argument to be made that such a duty exists vis-à-vis diversity training, including antiracist and anti-bias training as well as the many related “social justice” initiatives promulgated by public and private entities? After reading Helen Pluckrose and James Lindsay’s Cynical Theories, one might well conclude that recognizing such a legal duty is overdue. Read Full Article »