Chancery splits on whether harassment is the board's problem, and there is no safe harbor

The difference that reaches a boardroom is procedural. Will ended Brola at the pleading stage ^[1]. McCormick let the red-flags claims against the eXp Realty directors go forward ^[4], and the allegation carrying them is that the board received repeated warnings and did not respond ^[5]. Once that survives dismissal, the live question stops being what the founder did and becomes what the directors' own files show they did about it.

The two tests cannot both be encoded in one reporting policy. Will's version asks whether the fiduciary abused the distinct authority of the corporate office, and treats harassment that any midlevel manager could have committed as work for employment law rather than fiduciary law ^[8][2]. McCormick's asks only whether a fiduciary's selfish misconduct harmed the corporation ^[9], with employees recast as company resources whose misuse she equated with embezzlement ^[6]. She also read Will's limiting principles as innovations rather than existing law ^[7].

Notice what did not decide either case. Brola arrived with a quantified corporate loss of roughly $1.6 million and was dismissed anyway ^[1]; Sanford advanced on the character of the conduct alleged and the board's non-response, with no comparable figure reported ^[4][5]. The pleading-stage variable across these two cases was characterization, not magnitude ^[1]. A board calibrated to loss thresholds is watching the wrong axis, and it has had less than a quarter to notice ^[2].

McCormick has said the two decisions may already amount to a split, and Brola is on appeal ^[10]. Ryan Bubb of USC Gould and Gabriel Cohen of NYU Grossman argue the disagreement is structural rather than personal: the oversight duty carries both the agency-cost job of informing the people who monitor managers and a public-ordering job that turns governance into an enforcement instrument for public law ^[13][11]. On their reading, whatever the Supreme Court does with Brola will not be the last such conflict ^[14].

That leaves documentation as the one variable a board controls in the interim, and the asymmetry is not close. Compliance machinery exists to route potential violations to directors positioned to investigate and prevent them ^[12]. Under Brola, a complaint about a senior executive can be closed out as a matter for employment counsel, with the statutory remedy treated as reason enough for fiduciary law to stand down ^[2][8]. Under Sanford, the same complaint is a red flag, and the record of what the board was told and when is the evidence ^[4][5]. A minuted escalation and a documented investigation cost committee hours. Their absence, in Sanford, is the claim ^[5].