Fiduciary Duty

Directors’ Duties: Fiduciary Duty and the Duty of Care

Directors’ Duties: Fiduciary Duty and the Duty of Care

Courts give the appropriate deference to the business judgment of directors as per the business judgment rule. The business judgment rule accords deference to a business decision, so long as it lies within a range of reasonable alternatives. It reflects the reality that directors are often better suited to determine what is in the best interests of the corporation. This applies to decisions on stakeholders' interests, as much as other directorial decisions. The rule shields business decisions from court intervention where they are made prudently and in good faith.