business judgment rule
- A legal principle shielding directors of corporations from liability for outcomes of sound, well-informed decisions made in the genuine interests of the corporation
- The board of directors was covered by the business judgment rule when they made the decision to cut costs by relocating headquarters.
- In the case of a risky investment, the business judgment rule could save the corporate directors from being held accountable should the decision lead to losses.
- Because they had done comprehensive research before making the decision, the business judgment rule protected the company's board of directors from any liability.