Not Available for Download

The Modest Business Judgment Rule

Posted: 10 Jul 2000  

Lyman Johnson

Washington and Lee University - School of Law; University of St. Thomas, St. Paul/Minneapolis, MN - School of Law

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.

Suggested Citation

Johnson, Lyman, The Modest Business Judgment Rule. Available at SSRN: https://ssrn.com/abstract=223811

Lyman P. Q. Johnson (Contact Author)

Washington and Lee University - School of Law ( email )

Lexington, VA 24450
United States
540-458-8515 (Phone)
540-458-8488 (Fax)

University of St. Thomas, St. Paul/Minneapolis, MN - School of Law

MSL 400, 1000 La Salle Avenue
Minneapolis, MN Minnesota 55403-2005
United States

Paper statistics

Abstract Views
989