Ann Lipton remarks:
Tesla is being sued again, this time by a stockholder who claims that Elon Musk’s … colorful … behavior on Twitter violates his settlement with the SEC, is a threat to corporate value, and that the Board’s failure to rein him in represents a violation of its duty of good faith (and hey, as I was drafting this very post Musk did it again). While I’m sure there are many things one could say about the lawsuit, the part that struck me was where the plaintiff alleged that the Board is dependent on Musk, in part, because Musk is indemnifying its members for any legal liability.
Check it out. With respect to the merits of the suit, it gets to issues we've discussed here a number of times:
My Pillow, Inc. and the perennial question of whether Caremark claims should lie when boards fail to monitor the CEO's personal life
Tom Lin argued that Caremark oversight duties continue to “present difficult issues concerning the monitoring of executive private behavior.”
CEO Private Lives in the Present Dystopia
"to what extent should a board have Caremark duties to monitor a CEO's private life."
