Business Judgment Rule

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Abstract

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
PublisherSpringer
Pages1-4
Number of pages4
ISBN (Electronic)9783030020064
Publication statusPublished - 2023

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