Good Business Judgement Rule

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

Good business judgement rule. The business judgment rule is a case law derived doctrine in corporations law that courts defer to the business judgment of corporate executives. More introduction to corporate resolution. Business judgment rule is a legal principle which grants directors and officers immunity from shareholder lawsuits if they acted in good faith.

The business judgment rule is invoked in lawsuits when a director of a corporation takes an action that affects the corporation and a plaintiff sues alleging that the director violated the duty of care to the corporation. 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. The business judgment rule rule the most prominent and important standard of judicial review under corporate law protects a decision of a corporate board of directors board from a fairness review entire fairness under delaware law unless a well pleaded complaint provides sufficient evidence that the board has breached its fiduciary duties or that the decision making process is tainted such as with a lack of independence or interestedness.

In suits alleging a corporation s director violated his duty of care to the company courts will evaluate the case. Business judgment rule is a legal principle which grants directors and officers immunity from shareholder lawsuits if they acted in good faith.