Abstract
In 1996, the Delaware Chancery Court's In re Caremark International Inc. Derivative Litigation decision was the first to recognize a director's fiduciary duty to oversee a corporation's compliance and ethics program. Two decades later, this Article locates Caremark within the ongoing history of compliance and ethics programs by tracing the parallel evolutions of the Caremark duty and another compliance and ethics landmark-the 1991 U.S. Sentencing Guidelines, which provided the first legal incentive for organizations to design, implement, and operate an effective compliance and ethics program. These two histories converged at an important point that yielded the Caremark decision: The Sentencing Guidelines influenced the 1996 Chancery Court decision to recognize the Caremark duty. Over the following twenty years, though, these histories sharply diverged. While amendments to the Sentencing Guidelines developed a robust account of director responsibilities, Delaware case law stalled, leaving Caremark's promise unfulfilled.