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.
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The highest standard of legal obligation that directors and officers owe to the company and its shareholders, requiring ...
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