It is an important case in United States corporate law and discusses a director's duty of care in the oversight context.

It raised the question regarding compliance, "what is the board's responsibility with respect to the organization and monitoring of the enterprise to assure that the corporation functions within the law to achieve its purposes?"

This in turn was said to enable the company's employees to commit criminal offences, resulting in substantial fines and civil penalties amounting to over $250 million.

"Legally, the board itself will be required only to authorize the most significant corporate acts or transactions: mergers, changes in capital structure, fundamental changes in business, appointment and compensation of the CEO, etc.

'[4] But, since Smith v. Van Gorkom,[5] it was clear that 'relevant and timely information is an essential predicate for satisfaction of the board's supervisory and monitoring role under s 141 of the DGCL.

Chief Justice Strine quoted Caremark, in adding that “A board’s “utter failure to attempt to assure a reasonable information and reporting system exists” is an act of bad faith in breach of the duty of loyalty.”[8]