Guy is a director of Healthcare Corporation. Guy attempts to use his best judgment in guiding corporate management but makes a few honest mistakes. He may be protected from liability for these mistakes by

A) business success insurance.
B) the business judgment rule.
C) the duty of loyalty.
D) none of the choices.

Question

Freshela Labrador · Accepted Answer

Final Answer : B, Explanation :  The business judgment rule protects directors from liability for decisions that result in corporate losses or damages if those decisions were made in good faith, with the care that an ordinarily prudent person in a like position would exercise, and with the reasonable belief that the decisions were in the best interests of the corporation. Guy's honest mistakes, made in an attempt to use his best judgment, would likely be protected under this rule.

Definitions

Learning Objectives

Learning Objectives

Related questions