Delaware law has fundamentally changed fiduciary duty rules, lowering breach thresholds. This change extends to all corporate officers, including CMOs, who now face personal accountability for vendor decisions. CMOs are particularly vulnerable due to significant go-to-market (GTM) expenditures, weak marketing attribution, and the nature of consulting relationships. Failing to implement risk mitigation systems when approving engagements presents legal risks under Delaware law. Consequently, wasted spending can negatively impact earnings per share (EPS), increasing the likelihood of shareholder lawsuits against companies heavily invested in GTM activities.
In 2023 and 2024, Delaware lowered the threshold for breach of fiduciary duty to negligent oversight, extending the duty to all corporate officers and individual liability for breach.
For CMOs, approval of consulting engagements without risk mitigation systems now poses a personal legal risk under Delaware law, beyond traditional budget concerns.
GTM spend constitutes a significant portion of budgets for companies, leading to unique exposure for CMOs due to the material impact on company performance.
AI is transforming GTM teams into fiduciary powerhouses, as companies must actively demonstrate oversight and accountability in their marketing strategies.
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