To Obtain the Protection of the Business Judgment Rule, a Director

question 34

Multiple Choice

To obtain the protection of the business judgment rule, a director must meet certain requirements in arriving at his or her decisions. He or she must:

• A) make an informed decision; be free from conflicts of interest; and must have a rational basis for believing that the decision is in the best interests of the corporation.
• B) make a subjectively rational decision that is based on a cost benefit analysis.
• C) make an informed decision that promised to make the corporation a substantial profit; the decision need not be objectively rational, only subjectively rational.
• D) use the court's business judgment for all of the corporation's matters.

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