Business Judgment Rule Management

It is rooted in the principle that the directors of a corporation.

Business judgment rule management. The business judgment rule is a case law derived doctrine in corporations law that courts defer to the business judgment of corporate executives. It is contended that this rule which affords protection to directors who have made honest decisions will provide the necessary balance between greater accountability and economic efficiency. The business judgment rule has been described in delaware case law as follows.

Black s law dictionary menyebutkan business judgment rule is rule immunizes management from liability in corporate transaction undertaken within power of corporation and authority of management where there is reasonable basis to indicate that transaction was made with due care and goof faith. The rule exists in some form in most common law countries including the u. Pemahaman tersebut sejalan dengan terminologi business judgement rule menurut black s law dictionary yang diartikan sebagai rule immunizes management from liability in corporate transaction undertaken within power of corporation and authority of management where there is reasonable basis to indicate that transaction was made with due care and good faith henry campbell black.

For the purpose of this paper the authors adopted a doctrinal legal approach in. The business judgement rule is a presumption that in making a business decision the directors of a corporation acted on an informed basis in good faith and in the honest belief that the action taken was in the best interests of the company. Absent an abuse of discretion that judgement will be respected by the courts.

Are clothed with presumption which the law accords to them of being in their conduct by a bona fide regard for the interests of the corporation whose affairs the stockholders have committed to their charge. Business judgment rule generally the business judgment rule is a judicial doctrine arising from courts respect for corporate self governance as well as their dislike for second guessing the business decisions of corporate directors and officers.