All ▸ Bar 2024 ▸ COMMERCIAL AND TAXATION LAWS ▸ I. CORPORATION LAW (R.A. No. 11232, Revised Corporation Code) ▸ D. Directors, Trustees, and Officers ▸ 10. Business Judgment Rule 2

Question

Directors, Trustees, and Officers: Business Judgment Rule

Scenario:

Company XYZ, a publicly traded company, is considering a major expansion plan. The board of directors has been presented with three potential options: Option A, Option B, and Option C. Each option has its own risks and potential benefits. The directors have thoroughly discussed the options during several board meetings and have sought expert opinions to assist them in making an informed decision.

Question:

Applying the Business Judgment Rule, discuss the factors that the directors should consider in evaluating and making a decision among the three options. Cite the specific provisions, if any, under Philippine law that are relevant to the Business Judgment Rule.

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