Business judgement rule

What is the business Judgemental rule?
The business judgment rule protects companies from frivolous lawsuits by assuming that, unless proved otherwise, management is acting in the interests of the corporation and its stakeholders.
The rule assumes that managers will not make optimal decisions all the time..
Business Judgment Rule: Defined.
A presumption that in making business decisions, corporate directors and officers (minority: only directors) acted on an informed basis, in good faith, and in honest belief that the action was in best interests of the company.

The Business Judgment Rule [1] Officers and directors must make decisions that they believe, in good faith, to be in the best interests of their companies and must make decisions after appropriate research and due diligence inquiries. The decisions must be the products of appropriate care and thought.

The business judgment rule protects companies from frivolous lawsuits by assuming that, unless proved otherwise, management is acting in the interests of the corporation and its stakeholders. The rule assumes that managers will not make optimal decisions all the time.

The business judgment rule is a case-law-derived doctrine in corporations law that courts defer to the business judgment of corporate executives. Wikipedia

Business judgement rule

What is the business Judgemental rule?