A recent addition to Delaware’s Court of Chancery, Lori Will has swiftly become a trailblazer in handling politically charged corporate disputes linked to environmental, social, and governance (ESG) issues. Will’s notable decision in a case involving Walt Disney Co. exemplifies her unique approach to balancing corporate interests with societal concerns.
Disney’s Dilemma: A Case Study in ESG Dynamics
In June, Will ruled in favor of Walt Disney Co., asserting the company’s right to address employees’ concerns about a Florida law restricting discussions on sexual orientation in classrooms. Despite the controversy surrounding the company’s public stance against the law, Will decided against disclosing internal documents to shareholders, emphasizing the potential damage to corporate culture and employee morale if the board remained silent.
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A Pioneer in Chancery: Lori Will’s Journey
Lori Will, a first-generation college graduate and mother of two, was the fifth female judge on the Court of Chancery. Her diverse background includes a stint as a law clerk at the Chancery Court and years of private practice at prominent firms like Skadden Arps and Wilson Sonsini. Transitioning to Vice Chancellor in 2021, Will faces the emerging challenge of navigating politically fraught cases in her distinguished career.
Balancing Act: Corporate Law and Societal Expectations
In an interview, Vice Chancellor Will discussed the delicate balance required in addressing ESG-related disputes. Using the Disney case as an example, she highlighted the board’s responsibility to consider long-term shareholder value, employee satisfaction, and sustainable business practices. While acknowledging potential political backlash, Will stressed the importance of a clearheaded and careful approach in the current polarized societal landscape.
Criticisms and Challenges: Barr’s Opinions and Caremark Claims
The Chancery Court, facing criticism from former U.S. Attorney General William Barr, is navigating a landscape where ESG considerations are questioned for potentially jeopardizing Delaware’s status as a corporate headquarters hub. Additionally, the court is handling an influx of Caremark claims, putting pressure on boards to reassess risk oversight in the wake of recent decisions extending oversight duties to corporate executives.
Lori Will’s Perspective: Overlap of Caremark Claims and ESG
As a seasoned expert in Caremark claims, Will recently pushed back against the notion that corporate executives have more outstanding oversight obligations than board members. In the case of scooter-maker Segway, she emphasized that officers’ management of day-to-day matters doesn’t make them guarantors of adverse outcomes from imperfect business decisions. She encourages boards to proactively identify key ESG considerations, align strategic execution with long-term value, and remain vigilant for emerging issues.
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