Business Judgment Rule

Research output: A Conference proceeding or a Chapter in BookEntry for encyclopedia/dictionarypeer-review


The business judgment rule is a rule in corporate law which provides directors of a business corporation a defense in lawsuits where corporate decisions have been challenged in the courts. The rule provides a defense where directors can demonstrate that they have acted in good faith. The rule is based on the general corporate law principle that the courts will not impose liability where a corporate decision has had negative consequences for the company provided that the directors have acted in the best interests of the company when taking those decisions (Arsht 1979; Sheehy and Feaver 2014).
Original languageEnglish
Title of host publicationEncyclopedia of Sustainable Management
EditorsSamuel Idowu, René Schmidpeter, Nicholas Capaldi, Liangrong Zu, Mara Del Baldo, Rute Abreu
Number of pages4
ISBN (Electronic)9783030020064
Publication statusPublished - 2023


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