In late 2013 and early 2014, Target Corporation reported a data breach possibly affecting more than 100 million customer credit and debit card accounts.

Plaintiffs brought a shareholder derivative suit on January 21, 2014, in which they alleged that Target's directors and board members had breached their fiduciary duties by neglecting possible security weaknesses and failing to comply with existing security controls.

Plaintiffs further alleged that the company likely had not complied with industry security standards for payment card data, that damage to the company's reputation from the breach had diminished sales, and that the company was being weakened by allocating resources to deal with matters surrounding the breach.

What would the shareholders have to prove to prevail on their claims?

If you were an outside director of Target, would you demand the resignation of the chief executive officer?

[Verified Shareholder Derivative Complaint for Breach of Fiduciary Duty and Waste of Corporate Assets, Kulla v. Steinhafel, No. 0:14-cv-00203 (D. Minn. Jan. 21, 2014).]