Business Judgment Rule
A legal principle that protects directors and officers from personal liability for business decisions made in good faith, with reasonable care, and in the honest belief that the action is in the best interest of the company. The business judgment rule creates a presumption that directors acted properly, shifting the burden of proof to those challenging the decision. This protection encourages directors to make bold strategic decisions without fear of being second-guessed by courts.
Related Terms
The highest standard of legal obligation that directors and officers owe to the company and its shareholders, requiring ...
A fundamental fiduciary obligation requiring directors to act with the level of care, diligence, and skill that a reason...
A core fiduciary duty requiring directors to place the interests of the corporation and its shareholders above their own...
Directors and Officers (D&O) insurance is a liability insurance policy that protects the personal assets of corporate di...
More Legal & Compliance Terms
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