Asked by Michael Frank on May 10, 2024
Verified
Under the business judgment rule,corporate managers:
A) must not make uninformed decisions.
B) may have conflicts of interest.
C) are not required to make reasonable investigations.
D) may not benefit even as shareholders.
Business Judgment Rule
A rule protecting business managers from liability for making bad decisions when they have acted prudently and in good faith.
Uninformed Decisions
Choices made without access to all necessary information, knowledge, or understanding, which can lead to adverse outcomes.
Conflicts Of Interest
Situations where an individual's or organization's personal interests could potentially influence or appear to influence their decisions in their official capacity.
- Understand the concept and implications of the business judgment rule in protecting corporate directors.
Verified Answer
JG
Jasmine GriffinMay 12, 2024
Final Answer :
A
Explanation :
Under the business judgment rule,corporate managers must make informed decisions after conducting reasonable investigations.
Learning Objectives
- Understand the concept and implications of the business judgment rule in protecting corporate directors.