Which of the following is true of the business judgment rule?

Question

Quizplus · Accepted Answer

The business judgment rule encourages the undertaking of high-risk, socially desirable endeavors by protecting directors from personal liability for decisions made in good faith and with reasonable care. Option B and C are incorrect as the rule holds directors, not officers, liable to the corporation. Option D is incorrect as the rule requires a court to evaluate the decision-making process at the time the decision was made, rather than with the benefit of hindsight.

Which of the Following Is True of the Business Judgment