Michael W. Peregrine and Nathan Barnett

In the following guest post, Michael W. Peregrine and Nathan Barnett examine a recent Delaware Chancery Court decision dismissing oversight claims against Boeing directors arising from the January 2024 mid-air door-plug incident. As they explain, the decision provides important guidance on the continuing application of the Delaware courts’ Caremark doctrine, reaffirming that bad faith remains the essential prerequisite for oversight liability, clarifying the distinction between compliance risks and business risks, and offering additional insight into what constitutes a true “red flag” for board oversight purposes. The authors also discuss the practical governance lessons boards can draw from the decision and the importance of maintaining a robust compliance framework. Michael Peregrine is a retired lawyer and a fellow of the American College of Governance Counsel, and Nathan Barnett is a partner with McDermott, Will &Schulte LLP. Our thanks to Michael and Nathan for allowing us to publish their article on our site.

Continue Reading Guest Post: New Caremark Decision Provides Good News About Bad Faith

The U.S. IPO market has continued its strong resurgence in 2026. According to the latest IPO statistics compiled by Benjamin P. Edwards, Associate Dean for Faculty Development and Research and Professor of Law at the William S. Boyd School of Law at the University of Nevada, Las Vegas (UNLV), and his research team, IPO activity through August reflects a robust issuance environment featuring a mix of traditional operating company IPOs, direct listings, and a surprisingly strong return of SPAC offerings.

The SPAC resurgence is particularly noteworthy because it follows a period in which many de-SPAC companies struggled to meet the optimistic projections that helped fuel the prior SPAC boom. And, while sponsors are once again launching blank-check companies, courts continue to issue significant rulings arising from de-SPAC transactions completed during the 2020-2021 SPAC boom.

Continue Reading IPO Activity Roars Back While SPAC Litigation’s Long Tail Continues

As we have noted on this site in recent years, privacy-related issues have been and remain a significant potential source of D&O risk and liability exposure. In the latest example of the ways that privacy-related concerns can translate into D&O claims, a plaintiff shareholder has filed a shareholder derivative lawsuit against the board and controlling shareholders of company Alphabet alleging that the defendants violated their fiduciary duties by failing to take steps to protect the company from over $4.5 billion in fines, penalties, and settlements arising from alleged privacy violations. A copy of the redacted public version of the September 22, 2026, complaint can be found here.

Continue Reading Alphabet Board Hit with Privacy-Related Follow-On Derivative Lawsuit

As the 2026 proxy season recedes into the rearview mirror, several clear themes have emerged. Perhaps the most notable is that, despite years of intense focus on environmental and social issues, shareholder attention has increasingly returned to traditional governance concerns. Governance proposals not only proved more resilient than other proposal categories, but they also received some of the strongest levels of investor support.

The level of backing these proposals received indicates that investors continue to place a premium on board oversight, accountability, and governance frameworks as the first line of defense against emerging risks. At the same time, investors are demonstrating a growing interest in how boards oversee artificial intelligence, reflecting the reality that AI has become both a business opportunity a potential source of operational, regulatory, and litigation risk.

These developments are unfolding against a rapidly changing regulatory backdrop. During the 2026 proxy season, the SEC significantly reduced its traditional involvement in the Rule 14a-8 no-action process, leaving issuers with greater responsibility for shareholder proposal exclusion decisions. Meanwhile, the agency has reportedly begun considering rescission of Rule 14a-8 altogether, a move that could shift primary responsibility for shareholder proposal matters back to state law.

As discussed in more detail below, these governance trends and changes in the shareholder proposal landscape suggest that board oversight and accountability, particularly with respect to AI, may become increasingly important indicators of D&O risk.

2026 Proxy Season

Several recently published reviews of the 2026 proxy season reveal a consistent pattern regarding investor priorities.

According to ISS-Corporate, overall shareholder proposal volume fell to a five-year low, but governance proposals proved remarkably resilient. Governance proposals increased in relative prominence, received the highest average shareholder support (31.4%), and were the only proposal category to consistently receive majority approval. D.F. King’s proxy season review reached a similar conclusion, noting that governance proposals accounted for an increasing number of shareholder proposal activity and most majority-supported proposals.

That governance focus is especially evident in the area of artificial intelligence. An ISS STOXX study of more than 3,000 Russell 3000 and S&P 500 companies found that only 8% disclosed board-level AI oversight, 9% disclosed formal AI governance policies, and 16% reported having at least one director with AI expertise, indicating that AI adoption is significantly outpacing AI governance. At the same time, EY reported growing investor demand for transparency around AI oversight and board expertise, noting that 37% of S&P 500 companies now disclose AI-related experience for at least one director, up from 11% in 2022.

Discussion

One of the more important takeaways from the 2026 proxy season is how investors increasingly view governance as the mechanism through which boards should oversee emerging risks. The growing focus on AI oversight reflects an expectation that boards establish governance structures around technology that present significant strategic, regulatory, and litigation risks.

That development is particularly noteworthy considering the significant rise in AI-related D&O claims. 24 AI-related federal securities class action lawsuits have been filed through September 28, 2026, compared to 16 during all of 2025, making AI-related litigation one of the most significant D&O claims trends of the year. The allegations have expanded well beyond traditional “AI-washing” claims and now include issues involving disclosure controls, infrastructure investments, competitive positioning, business disruption, and board oversight.

For D&O underwriters, the proxy season results may provide an early indication of where future scrutiny and litigation risk may emerge. While traditional governance indicators remain important, the increased investor focus on AI oversight suggests that governance surrounding emerging technologies may become an increasingly relevant indicator of D&O risk.

Underwriters may therefore want to evaluate whether boards have clearly assigned responsibility for AI oversight, adopted formal governance policies, developed relevant expertise, and implemented disclosure controls around AI-related statements and projections. Notably, these are the same issues attracting attention from both investors and plaintiffs’ lawyers. As a number of guest authors on The D&O Diary have recently observed, effective AI governance requires clear oversight, board engagement, relevant expertise, and disciplined disclosure practices. The proxy season data suggests investors have reached the same conclusion.

Companies that aggressively promote AI opportunities while providing limited evidence of board-level oversight may present a different risk profile than companies with more mature governance frameworks. That distinction may become increasingly relevant as AI-related litigation and regulatory scrutiny continue to evolve, particularly given the ISS STOXX finding that relatively few companies currently disclose formal AI oversight structures or governance policies.

At the same time investors are demanding stronger board oversight of emerging risks such as AI, the regulatory framework governing how shareholders express those concerns through the proxy process is also evolving.

The significance of the SEC’s evolving Rule 14a-8 approach extends beyond shareholder proposal mechanics. For decades, Rule 14a-8 has served as the primary mechanism through which shareholders raise governance concerns and seek board accountability through the proxy process. As SEC staff involvement in no-action determinations declines, proposal volume and ballot outcomes may become less reliable indicators of investor priorities. Accordingly, the decline in shareholder proposals during the 2026 proxy season should not necessarily be interpreted as diminished investor concern. Rather, investors may increasingly pursue governance objectives through engagement, director elections, activist campaigns, or litigation. This distinction is important because the season’s strong support for governance proposals suggests that governance remains central to investor expectations, even as the mechanisms for expressing those expectations evolve.

For D&O underwriters, the key implication is that governance concerns may become more important than proposal statistics themselves. Indeed, the 2026 proxy season suggests investors remain highly focused on board accountability, risk oversight, and governance structures, particularly with respect to AI. Even if proposal activity declines as a result of regulatory changes, investor concerns are unlikely to disappear and may instead manifest through engagement, voting pressure, activism, or litigation.

As a result, underwriters may increasingly benefit from evaluating the substance of a company’s governance framework rather than relying solely on traditional proxy season metrics. For emerging risks such as AI, governance quality may become a useful proxy for future D&O risk.

My overseas assignment for The D&O Diary continued this week with a stop in the Catalan city of Barcelona, nestled between the mountains and the sea in coastal Spain. I was very happy to be back in Barcelona again, because I know from prior experience that the city’s combination of great weather, splendid setting, excellent food, and architectural richness is pretty hard to beat.

Continue Reading Barcelona

For both public and private companies and their boards, directors and officers (D&O) insurance continues to be a critical component for mitigating potentially significant financial exposure from litigation. In the following guest post, Scott N. Sherman and Edgar A. Neely IV discuss key D&O policy terms and concepts for directors to know for that selection process. Scott and Edgar are both partners at the Nelson Mullins law firm. We would like to thank Scott and Edgar for allowing us to publish their article on this site. Here is the authors’ article.

Continue Reading Director Checklist for D&O Policies: 10 Key Terms and Provisions Boards Should Assess

In our recent round-up of the top D&O stories so far this year, one of the top developments in 2026 we noted is the growing amount of AI-related D&O litigation. The AI-related litigation trend has continued to develop, as new AI-related lawsuits continue to be filed. In recent days, plaintiffs’ lawyers have filed two further AI-related securities class action lawsuits, first, against the Chinese Internet company Baidu, and, separately, against the AI-powered Internet advertising firm AppLovin. Both new lawsuits are based on AI-washing type allegations. The new lawsuit against Baidu also reflects the surging levels of securities litigation this year involving Chinese companies, as discussed further below.

Continue Reading AI-Related Securities Suit Filings Continue to Surge

The D&O Diary has been following the evolving litigation and management liability issues arising from the Trump Administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, the subsequent judicial decisions invalidating those tariffs, and the wave of refund litigation that has followed. As these developments have unfolded, tariff-related litigation has expanded beyond refund actions and shareholder claims to include consumer lawsuits alleging that companies improperly passed tariff costs on to customers.

One recent example is the litigation filed against Levi Strauss & Co. (Levi’s) in California and Louisiana. The allegations against Levi’s reflect the continued filing of tariff-related claims at a time when the scope and applicability of U.S. tariffs remain in flux. Although the tariffs imposed under IEEPA were invalidated by the Supreme Court, other tariffs and tariff-related trade measures remain in effect, including recent U.S. tariffs on Canadian imports and Canada’s corresponding countermeasures. These continuing trade actions demonstrate how rapidly changing tariff policies can create significant challenges for corporate governance, disclosure practices, and risk management.

Continue Reading Tariffs and the Continuing Wave of “Double Recovery” Consumer Class Actions

As crypto-related litigation continues to mature, the focus has shifted beyond the threshold question of whether digital assets constitute securities. Increasingly, private plaintiffs are pursuing claims that resemble traditional securities litigation including allegations involving disclosure failures, market misconduct, and investor losses. At the same time, the Clarity Act, legislation that would have established a statutory framework for digital asset regulation and clarified the respective roles of the SEC and CFTC, failed to advance through congress. Yet digital assets continue to move further into the financial mainstream, with reports that major U.S. banks are exploring a joint stablecoin initiative.

Against that backdrop, a recent decision in the long-running Jump securities class action arising from Terraform Labs (Terraform) collapse underscores the evolving nature of crypto-related litigation. In a September 2, 2026, opinion, the Northern District of California largely denied motions to dismiss, allowing core securities fraud and market manipulation claims to proceed. Beyond its high-profile factual backdrop, the ruling highlights how crypto litigation is increasingly being analyzed through familiar securities law concepts rather than focusing solely on whether a particular digital asset qualifies as a security.

Continue Reading Crypto Securities Suit Survives Motion to Dismiss