The business judgment rule is a United States case law-derived concept in corporations law whereby the "directors of a 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".
To challenge the actions of a corporation's board of directors, a plaintiff assumes "the burden of providing evidence that directors, in reaching their challenged decision, breached any one of the triads of their fiduciary duty — good faith, loyalty, or due care". Failing to do so, a plaintiff "is not entitled to any remedy unless the transaction constitutes waste . . . the exchange was so one-sided that no business person of ordinary, sound judgment could conclude that the corporation has received adequate consideration".
Read more about Business Judgment Rule: Basis, Duty of Care and Duty of Loyalty, Standard of Review, Rationale
Famous quotes containing the words business, judgment and/or rule:
“Mily: You must remember me!?
Tadeusz: I never remember pretty women. It’s so expensive.
My friend, after twenty thousand years murder is still a business that’s mainly in the hands of amateurs.”
—Orson Welles (1915–1985)
“The repudiation of the primacy of understanding means the repudiation of the norms of judgment as well, and hence the abandonment of all ethical standards.”
—Johan Huizinga (1872–1945)
“Charity is a cop-out so traditionally female in its apparent self-effacement that there seems resonant comfort in it. We’re no longer supposed to serve the imaginations of men who have dominated us. We are to give up ourselves instead to those whose suffering is greater than our own. Looking down is just as distorting as looking up and as dangerous in perpetuating hierarchies.”
—Jane Rule (b. 1931)