The business judgment rule is important because it reflects the principle that ______, not ______, have the greatest latitude to run companies.
A)shareholders; company directors
B)company directors; shareholders
C)managers; company directors
D)shareholders; managers

Question

Quizplus · Accepted Answer

The business judgment rule states that company directors have the greatest latitude to run companies and make decisions on behalf of the company, without being held personally liable for those decisions. This principle allows them to exercise their expertise and judgment in the best interests of the company, without the risk of shareholder interference or lawsuits. Therefore, Choice B is the correct answer.

The Business Judgment Rule Is Important Because It Reflects the Principle