The ______ is the notion that shareholders cannot second-guess management decisions.
A)management responsibility doctrine
B)business judgment rule
C)board of directors supremacy
D)limited liability corporation

Question

Quizplus · Accepted Answer

The business judgment rule is a legal principle that gives management the benefit of the doubt when making business decisions. It assumes that management acts in good faith and in the best interest of the company, and that their decisions are informed and made with reasonable care. Shareholders cannot second-guess management decisions unless they can demonstrate that the decision was made in bad faith, with a conflict of interest, or without due diligence. The other answer choices do not accurately describe this principle.

The ______ Is the Notion That Shareholders Cannot Second-Guess Management