Question

Imagine that you are a director of a corporation and you are facing a critical decision that could potentially benefit the company but may involve some level of risk. In applying the Business Judgment Rule, answer the following questions based on Philippine laws:

1. What is the Business Judgment Rule? Explain its purpose and importance in corporate decision-making. (5 points)
2. What are the elements that need to be satisfied for the Business Judgment Rule to apply? (5 points)
3. Assuming that a fellow director made a decision that ultimately resulted in a significant financial loss for the corporation, discuss the circumstances under which the Business Judgment Rule may shield the director from personal liability. (10 points)
4. In a situation where conflicts of interest are present among the directors, how does the Business Judgment Rule come into play? Explain the requirements for the proper exercise of business judgment in such situations. (10 points)
5. Provide a real or hypothetical case example where the Business Judgment Rule was applied in a Philippine court. Discuss the court's reasoning and the outcome of the case. (15 points)