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Article
The Modest Business Judgment Rule
Business Lawyer
  • Lyman P.Q. Johnson, Washington and Lee University School of Law
Document Type
Article
Publication Date
1-1-2000
Abstract

This article argues that Delaware mis-formulates and mis-uses the business judgment rule. Properly understood, the business judgment rule's function in corporate law is quite modest. It is a narrowly-drawn judicial policy of nonreview which, in duty of care cases, shields the merits of board decisions from judicial scrutiny. The article contends that the business judgment rule, therefore, should be de-emphasized as an analytical construct in the law of director fiduciary duties and should be sharply differentiated from the broader-gauged duty of due care. Doing so will pave the way for Delaware courts to rethink the importance of articulating a robust, generally applicable ? but concisely formulated ? director duty of due care.

Comments

“This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.”

Citation Information
Lyman P.Q. Johnson, The Modest Business Judgment Rule, 55 Bus. Law. 625 (2000)