If a director makes a decision that inadvertently harms the company, shareholders can hold the director liable for the bad decision under all circumstances.

Question

Quizplus · Accepted Answer

Directors are protected by the "business judgment rule," which shields them from liability for decisions made in good faith and with the belief that they are acting in the company's best interest, even if those decisions ultimately harm the company.

If a Director Makes a Decision That Inadvertently Harms the Company