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

Review Question D: Directors, Trustees, and Officers - Business Judgment Rule 2

Scenario:

ABC Corporation is a publicly listed company with a board of directors responsible for making important decisions to ensure the company's success. As part of their duty, directors are expected to exercise their business judgment in the best interest of the corporation.

Questions:

Discuss the concept of the Business Judgment Rule and its importance in corporate governance.
In a particular situation, the board of directors of ABC Corporation made a decision that resulted in financial losses to the company. Analyze whether the Business Judgment Rule can be invoked by the directors to protect them from personal liability.
Enumerate and explain at least three exceptions or limitations to the application of the Business Judgment Rule in the Philippines.

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