The business judgment rule protects shareholders for honest mistakes of judgment.

Name: The business judgment rule protects shareholders for honest mistakes of judgment.
Brand: Quizplus
Rating: 4.9 (47 reviews)

Question

Quizplus · Accepted Answer

The business judgment rule protects directors and officers from liability for honest mistakes of judgment, not shareholders. It presumes that in making a business decision, the directors of a company 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.

The Business Judgment Rule Protects Shareholders for Honest Mistakes of Judgment