The business judgment rule states that directors and officers are personally liable to the corporation or its shareholders for honest mistakes of judgment.

Question

Quizplus · Accepted Answer

The business judgment rule provides protection to directors and officers from personal liability for good faith decisions made on behalf of the corporation, even if those decisions turn out to be wrong. So, directors and officers are not personally liable to the corporation or its shareholders for honest mistakes of judgment.

The Business Judgment Rule States That Directors and Officers Are