Duty of Care
A fundamental fiduciary obligation requiring directors to act with the level of care, diligence, and skill that a reasonably prudent person would exercise in similar circumstances when making decisions on behalf of the company. The duty of care requires directors to stay informed, review materials before meetings, ask questions, and exercise independent judgment. Directors who fail to meet this standard may be held personally liable, though the business judgment rule provides significant protection for good-faith decisions.
Related Terms
The highest standard of legal obligation that directors and officers owe to the company and its shareholders, requiring ...
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A legal principle that protects directors and officers from personal liability for business decisions made in good faith...
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