• The rule shields directors and officers from liability for unprofitable or harmful corporate transactions if the transactions were made in good faith, with due care, and within the directors’ or officers’ authority. [Cases: Corporations 310(1). C.J.S. Corporations §§ 475, 477–484, 487–489.]
business judgment rule
Corporations. The presumption that in making business decisions not involving direct self-interest or self-dealing, corporate directors act on an informed basis, in good faith, and in the honest belief that their actions are in the corporation’s best interest.
