A presumption that, in making a business decision, directors of a corporation act on an informed basis, in good faith, and in the honest belief that their actions are in the best interests of the corporation.
A legal doctrine that protects directors and officers of a corporation from personal liability for losses arising from a prudent, good faith decision.
This rule immunizes management from liability in corporate transaction undertaken within both power of corporation and authority of management where there is reasonable basis to indicate that a transaction was made with due care and in good faith.
The rule states that directors of corporations will not be held personally liable for unwise business decisions providing that the directors made an informed decision and that decision was not tainted by self-interest.
A doctrine that protects officers and directors of a corporation from personal liability so long as they acted in good faith, with due care, and within the officer or director's authority.
An important rule of law followed by most states. It protects the company's agents from liability for the day to day decisions regarding the operations. Essentially, the agents of the corporation are protected from liability if their decisions were reasonably informed, even if those decisions turn out badly. The rule does not apply when conflicts of interest, self dealing, or elements of fraud are involved.
The legal principle that assumes the board of directors is acting in the best interests of the shareholders unless it can be clearly established that it is not. If the board was found to violate the business judgment rule, it would be in violation of its fiduciary duties to the shareholders.
Rule granting directors of publicly listed companies' immunity from liability if their actions were executed in good faith, using sound business judgment and exercised with reasonable care.
Under common law, an absence of liability for corporate directors and officers if they have used rational business judgment and have no conflict of interest.
A rule of law, which prevents directors of a corporation from being held personally liable for unwise business decisions if the decision was informed and not tainted by self-interest.
The rule that shields directors from liability for mismanagement of the corporations that they serve.
The business judgment rule is a case law-derived concept in Corporations law whereby a court will refuse to review the actions of a corporation's board of directors in managing the corporation unless there is some allegation of conduct that (1) violates (a) the directors' duty of care, (b) duty of loyalty, or (c) duty of good faith; or (2) that the decisions of the directors lacks a rational basis. Courts often analyze the rational basis requirement as part of the director's duty of good faith.
