The __________ precludes imposing liability on directors and officers for honest mistakes in judgment if they act with due care, in good faith, and in a manner reasonably believed to be in the best interests of the corporation.
A) duty of diligence.
B) duty of obedience.
C) business judgment rule.
D) None of these is correct.

Question

Quizplus · Accepted Answer

The business judgment rule protects directors and officers from liability for decisions that result in loss or harm to the corporation as long as the decisions were made in good faith, with the care that an ordinarily prudent person would take, and with the belief that the decisions were in the best interests of the corporation.

The __________ Precludes Imposing Liability on Directors and Officers for Honest