This section contains the nature of the case and procedural background.

D served as Executive Vice President and Global Chief People Officer of McDonald's Corporation from 2015 until termination for cause in 2019. Easterbrook, the new CEO, and D promoted and participated in a 'party atmosphere' at the Chicago headquarters. The eighth floor of the Chicago office had an open bar where executives hosted weekly happy hours. Easterbrook and D frequently attended with their management teams. 'Male employees (including senior corporate executives) engaged in inappropriate behavior at these happy hour events, routinely making female employees feel uncomfortable.' Employees also frequently drank alcohol at other Company-affiliated events. Easterbrook, D, and other Company executives, including the Senior Vice President of Human Resources, participated in drinking excursions. Easterbrook and D developed reputations for flirting with female employees, including their executive assistants. Recruiters were encouraged to hire 'young, pretty females' from high-end stores to work in administrative roles at the Chicago headquarters. Easterbrook became known as a 'player' who pursued intimate relationships with staff. D failed to address complaints adequately. Former Company managers reported that 'HR leaders under Easterbrook ignored complaints about the conduct of co-workers and executives. Some of those people said they feared retaliation for reporting the conduct of co-workers and executives to HR.' The Company began to face increasing public scrutiny about problems with sexual harassment and misconduct, from complaints with the Equal Employment Opportunity Commission (EEOC) to a fast-food worker advocacy group organizing a walkout by Company employees in over thirty cities across the United States to draw attention to the EEOC complaints. Major news outlets covered these events. Company employees claimed that the human resources function turned a blind eye to harassment. In September 2018, workers from ten cities across the United States organized a one-day strike to protest sexual harassment and the failure of management to address it. United States Senator Tammy Duckworth sent an inquiry to Easterbrook about 'multiple sexual harassment complaints made by employees who work at McDonald's Restaurants in Detroit, Chicago, Los Angeles, and six other cities.' The Board received reports that D had committed acts of sexual harassment. D executed a 'Last Chance' letter, which confirmed that D's behavior was not an isolated incident. The Letter unambiguously stated that D's actions violated the Company's Standards of Business Conduct. It also noted that D's misconduct put 'the Company at significant risk.' D continued to serve as the Global Chief People Officer. A June 2019 Memorandum summarized the situation facing the Company and management's response. The Board's Strategy Committee on the issue confirmed that the Company (i) had developed a comprehensive plan around the issues of sexual harassment and safe and respectful workplace environments; (ii) will continue to be proactive; and (iii) will further evaluate how best to execute its strategy and be a leader on this issue. In October 2019, the Board learned that Easterbrook was engaging in a prohibited relationship with an employee. The Board decided to negotiate a separation agreement with Easterbrook. During a meeting on November 1, the Board finalized the separation agreement and terminated Easterbrook without cause. The Board terminated D for cause for an act of sexual harassment that violated the Last Chance Letter. Less than two weeks after Easterbrook left and the Board terminated Fairhurst, Company workers filed a class action lawsuit challenging the Company's systemic problems with sexual harassment (the 'Ries Action'). The Ries complaint contained detailed allegations about 'routine, severe abuse' at Company restaurants while Fairhurst served as Global Chief People Officer. In April 2020, workers filed another class action, this time on behalf of workers at Company-owned restaurants in Florida, seeking damages for sexual harassment, retaliation, and related misconduct (the 'Fairley Action'). According to the Fairley Action, 'three out of every four female non-managerial McDonald's employees have personally experienced sexual harassment at McDonald's, ranging from unwelcome sexual comments to unwanted touching, groping, or fondling, to rape and assault.' More than 75% of the Company's female workers reported being sexually harassed at work, and more than 71% reported that they suffered negative consequences for reporting harassment. Ps, stockholders of the Company, have sued D derivatively on the Company's behalf for breach of fiduciary duty. Ps claim D breached his fiduciary duties by allowing a corporate culture to develop that condoned sexual harassment and misconduct. They assert that D's fiduciary duties included a duty of oversight, which required that he make a good faith effort to establish a system that would generate the information necessary to manage the Company's human resources function. Ps argue that D breached his duty of oversight by consciously ignoring red flags. D has moved to dismiss the oversight claim under Rule 12(b)(6) for failing to state a claim on which relief can be granted. D contends that Delaware law does not impose any obligation on officers comparable to the duty of oversight as articulated in In re Caremark Int'l, 698 A.2d 959 (Del. Ch. 1996).

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