The Court noted that the allegations showed that the directors were aware of the red flags, but the complaint did not support the inference that directors failed to respond, making it "not possible to draw a pleading-stage inference that the Director Defendants acted in bad faith." The Court reviewed the duty of oversight claim under In re Caremark International Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996), specifically a "Red-Flags Claim." The Court noted that while Caremark liability could extend to the failure to monitor and react to sexual harassment, "plaintiffs must plead facts supporting [both] an inference that the red flags came to the attention of the Director Defendants" and "that the Director Defendants consciously failed to take action in response to the red flags." The Court noted that while the directors were indisputably aware of red flags, they also took action in response, calling special meetings to address the issue, receiving updates, and terminating the CEO.