Directors may escape liability for breaching their statutory duty to act with care and diligence under s 180(1)if they can satisfy the business judgment rule.Which of the following statements about the rule is true?

Question

Quizplus · Accepted Answer

Directors must satisfy all four of the tests to invoke the business judgment rule as a defense. This rule requires directors to make a business judgment in good faith for a proper purpose, without material personal interest, informed about the subject matter to the extent they reasonably believe to be appropriate, and rationally believe that the judgment is in the best interests of the corporation.

Directors May Escape Liability for Breaching Their Statutory Duty to Act