The courts have traditionally viewed it as their responsibility to sit in judgment of decisions made by corporate directors.

Question

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Courts generally adhere to the business judgment rule, which presumes that in making a business decision, the directors of a company have acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company. This rule limits courts from second-guessing the decisions made by corporate directors unless there is evidence of bad faith, lack of due diligence, or a breach of fiduciary duty.

The Courts Have Traditionally Viewed It as Their Responsibility to Sit