Business Judgement Rule

The Business Judgment Rule is a legal principle that protects company leaders, like directors and executives, when they make decisions in good faith and with due care. It assumes that their choices are made based on reasonable judgment and without conflict of interest. If a decision turns out poorly, they are generally not held personally responsible, as long as they acted honestly, thoughtfully, and within their authority. This rule encourages leaders to make bold and strategic decisions without the fear of unfair legal repercussions, provided they exercise proper diligence and good faith.