Business Judgment Rule Judicial Review

It is not a standard of conduct in itself.

Business judgment rule judicial review. This rule is found invoked in suits when a board takes an action and a plaintiff or complainant then sues alleging that the directors violated their duty of care. Indeed the delaware courts have often said that the business judgment rule is both a procedural guide dictating the terms of the plaintiff s first move and if the plaintiff fails to meet evidentiary burden a substantive rule of law protecting the substantive merits of the board s decision from judicial review. The business judgment rule has been described in delaware case law as follows.

While some countries like australia and germany have codified the business judgment rule other countries like the us japan. Business judgment rule generally. Act annotated official comment at 8 225 4th ed.

Stockholders falls under the business judgment rule provided the board exercises the duty of care and loyalty enhanced review under revlon cont d 21. The business judgment rule is the most prominent and important standard of judicial review under corporate law. 4 joseph hinsey iv business judgment and the american law institute s corporate governance project.

The business judgment rule as an immunity doctrine l. The rule sets forth a presumption that in making a business decision the directors of. 57 no 1 januari 2004 hlm.

The bjr is a judicial standard of review not a duty. The business judgment rule with only some countries adopting it 8 even among these countries there have been different methods of incorporating the business judgment rule into the law of corporate governance. The business judgment rule is a judicially created doctrine that pro tects directors from personal civil liability for the decisions they make on behalf of a corporation.

The business judgment rule the most prominent and important standard of judicial review under corporate law protects a decision of the corporate board of directors from a fairness review. The business judgment rule is a standard of judicial review of corporate director conduct. In today s era of corporate scandals global fi.