The Delaware Chancery Court Ruling of 2023 is a wake-up call. CMOs, CROs, and CDAOs are now personally responsible for oversight failures, bad data, and poor decisions. AI, especially Causal AI, is exposing the truth. Lawsuits are already happening. If you lead a team, you need to assess your risks, clean up your data, and use AI to protect yourself.
In AI Accountability Part 1, Mark Stouse and I talked about how AI is making executives more accountable. Now, we’re looking at the Delaware Chancery Court Ruling of 2023, a decision that puts more responsibility on business leaders. If you’re a CMO, CRO, or CDAO, this ruling could affect you in a big way. Here’s what you need to know about AI accountability in corporate leadership and how AI-driven risk management for executives can help.
REWATCH: Part 1 and Part 2 on LinkedIn.
Mark Stouse, CEO of Proof Analytics, put it simply: “If this ruling is so important, why isn’t everyone talking about it?”
The ruling made headlines in The Wall Street Journal and Financial Times with a sexual harassment lawsuit against McDonald’s, but outside legal circles, it didn’t get much attention.
“Historically, fiduciary duty had a very high bar—you had to almost prove nefarious intent. That’s no longer the case. If you’re an officer of a Delaware-domiciled company, you can now be held personally liable for negligence, incompetence, or just not knowing what’s in your own systems.”
Mark Stouse
This ruling affects roughly 90% of venture-backed companies in the U.S. and two-thirds of the Fortune 1000. Even privately held companies are under scrutiny.
If you’re in leadership, this matters to you.
Mark shared a case where a company settled for a huge amount because of bad CRM data. In fact, CRM data integrity (or lack thereof) has become a meme.
“I was supposed to be an expert witness in a case involving CRM data. The company settled for a lot of money out of court. The issue? The data was so flawed that it triggered fraud detection software. Sales reps had manipulated CRM records to hit incentives, creating a legal liability for the CRO, CIO, and CDAO.”
Mark Stouse
If your data is unreliable and you’re in charge of it, you’re responsible. Period.
Saying “I didn’t know” won’t protect you. Delaware fiduciary duty ruling impact is already being felt across multiple industries.
Each day AI is getting better and it’s making leaders more accountable.
“AI is going to be the great truth-teller inside corporations. Everything that can be known will be known or knowable.”
Mark Stouse
If your reports claim your marketing is driving revenue, but causal AI proves otherwise, that’s a problem.
If you’re in leadership, here’s a step-by-step guide to protect yourself:
Yes, the Delaware Chancery Court Ruling is a wake-up call. But it’s more of an opportunity to get ahead of potential litigation by cleaning up our data rather than fear-mongering.
Use AI to protect yourself. If you act now, you can stay ahead of the risks, prove your value, and future-proof your business.
“This is only the beginning. Shareholders, especially activists, are using this ruling to sue executives. If you’re not prepared, it’s just a matter of time.”
Mark Stouse
In AI Accountability Part 3, Mark and I will dive into the wave of lawsuits already happening and what you can do to stay ahead.
Stay tuned.
REWATCH: Part 1 and Part 2 on LinkedIn.
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Cheers!
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