A director may make business decisions in reliance on information provided to him without incurring liability for negligence as long as he:
A) notifies the preparer of the information.
B) is given a sworn affidavit by the preparer.
C) reasonably believes that the information is reliable.
D) conducts his own independent investigation.

Question

Quizplus · Accepted Answer

A director can rely on information provided to him as long as he reasonably believes it to be reliable. This is part of the business judgment rule, which protects directors from liability for decisions made in good faith based on adequate information.

A Director May Make Business Decisions in Reliance on Information