Re-examining the law and economics of the business judgment rule: Notes for its implementation in non-US jurisdictions

• Main Author: GURREA-MARTINEZ, Aurelio
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: business judgment rule; corporate directors; duty of care; liability; risk aversion; firm value; enforcement; business; courts; diversification; Business Organizations Law; Law and Economics
• Online Access: https://ink.library.smu.edu.sg/sol_research/2969; https://ink.library.smu.edu.sg/context/sol_research/article/4927/viewcontent/Re_examining_the_law_and_economics_of_the_business_judgment_rule_notes_for_its_implementation_in_non_US_jurisdictions.pdf
• Institution: Singapore Management University

The business judgment rule, as it has been traditionally understood, seems to be based on three underlying assumptions that make this rule economically desirable. First, directors are subject to a credible threat of being sued for a breach of the duty of care. Second, the primary role of the corpora...