Balancing the Scales: A Statutory Business Judgment Rule for Hong Kong?

Hong Kong Law Journal, Vol. 34, No. 2, 2004

25 Pages Posted: 22 Jun 2004

See all articles by Douglas M. Branson

Douglas M. Branson

University of Pittsburgh - School of Law (Emeritus)

Chee Keong Low

Chinese University of Hong Kong (CUHK) - School of Accountancy

Abstract

The collapse of Enron and WorldCom has focused considerable attention upon the company director as a 'gatekeeper' for good corporate governance. They are presently subject to ever increasing scrutiny and much of the recent reforms around the world have adopted a regulatory philosophy premised on keeping company directors on the 'straight and narrow' by compelling them to 'Do X', 'Do Y' or 'Do Z'. This approach presumes that legislators and regulators have the inherent ability to subject business decisions to systematic analysis and fails to recognize that such decisions often involve intangible and intuitive insights. This article seeks to balance the scales in favor of directors by offering them safe harbor through the enactment of a statutory business judgment rule for decisions that are made without any conflicts of interest and with full knowledge and appreciation of the material facts. In doing so, it will allow directors to get back to the basics of business within a capitalist framework namely, to promote entrepreneurism through the facilitation of legitimate business decisions and risk taking.

Suggested Citation

Branson, Douglas and Low, Chee Keong, Balancing the Scales: A Statutory Business Judgment Rule for Hong Kong?. Hong Kong Law Journal, Vol. 34, No. 2, 2004, Available at SSRN: https://ssrn.com/abstract=557236 or http://dx.doi.org/10.2139/ssrn.557236

Douglas Branson

University of Pittsburgh - School of Law (Emeritus) ( email )

3900 Forbes Ave.
Pittsburgh, PA 15260
United States
412-624-3437 (Phone)

Chee Keong Low (Contact Author)

Chinese University of Hong Kong (CUHK) - School of Accountancy ( email )

1018 Cheng Yu Tung Building
Shatin, N.T.
Hong Kong
(852) 3943-7891 (Phone)
(852) 2603-5114 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
858
Abstract Views
4,527
rank
31,048
PlumX Metrics