For the execution of company business by directors, various management judgements are required. Directors venture on risk management. If they make an overall judgement by using the knowledge as a professional manager, it is necessary to hold legal jud...
For the execution of company business by directors, various management judgements are required. Directors venture on risk management. If they make an overall judgement by using the knowledge as a professional manager, it is necessary to hold legal judgement in suspense or to exempt them from personal liability in consideration of the uncertain and flexible elements of management judgement. Though directors of corporation make decisions in good faith, with due care, and for the best interests of the company, their decisions may lead to damage to the company because of unpredictable economic situation or passive, flexible factors. It is necessary to handle management failure differently from simple mistakes or liability with fault.
However, the introduction of Business Judgement Rule doesn't automatically recognize discretionary power in management for directors widely. Instead, action norms of directors are expected as a prior effect when Business judgement Rule is introduced. Also, the function to present legal norms of a court is expected as a post effect.
From this viewpoint, introducing Business judgement Rule to Korean commercial law in limitation can seek the profits of diverse people concerned around company. In addition, it presents criteria for the range of lawful discretionary power to directors, requiring directors' responsible management. Therefore, it needs to be examined positively.