The Business Judgment Rule and Sphere Sovereignty

42 Pages Posted: 1 Feb 2011

Date Written: January 31, 2011


The Business Judgment Rule prevents courts from reviewing the substantive business decisions of corporate directors. The rule is a microcosm of the tension between government regulation and private autonomy that runs throughout corporate law. The Business Judgment Rule is protective of the self-determination of the business enterprise, but its rationale is, not surprisingly, debated. Courts and commentators have offered a variety of explanations, but these still leave the rule open to the accusation that it is a sui generis privilege granted to corporations.

This Article places the Business Judgment Rule in the context of a large-scale social theory: sphere sovereignty. In a sphere-sovereignty framework, the Business Judgment Rule should not be viewed as a special privilege of corporations. Rather, it should be viewed as a recognition by the courts of the autonomy of each societal sphere, created by God to pursue unique ends and purposes. The political and theological theory of sphere sovereignty provides a basis for the Business Judgment Rule’s various provisions and offers suggestions for its future development.

Keywords: Corporate law, Business Judgment Rule, Sphere Sovereignty, Autonomy, Kuyper, Dooyeweerd, business enterprise, institutional pluralism

Suggested Citation

Weinberger, Lael Daniel, The Business Judgment Rule and Sphere Sovereignty (January 31, 2011). Thomas M. Cooley Law Review, Vol. 27, No. 2, 2010. Available at SSRN:

Lael Daniel Weinberger (Contact Author)

Harvard Law School ( email )

Cambridge, MA 02138
United States


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