Research On The Business Judgment Rule

Business Judgment Rule (BJR) is a very important legal system, which was gradually established in the field of American corporation law. According to the BJR, the court will not interfere with the directors'decision if it was made with the performance of duty of care, and a business decision is recognized as a normal one so far as directors are reasonably informed in making the very decision, with good faith and for the best interest of the corporation; the very decision will not rise out director liability, it will not be invalided or revoked. Business Judgment Rule pays much attention to the complexity and risks of business activities. It not only can protect the directors'freedom of decision making, but also can balance the risks and benefits between the directors, shareholders and the company. The court can use it as a judicial review standard.According to article 148 of the new P.R.C Corporation Law, (hereby refer to as Corporation Law), which was enacted on January 1st 2006, the directors own a duty of care to the company, but what is a duty of care, what is the standard of care and how the court review whether or not there is a breach of care, the Corporation Law said nothing at this aspect.Because the above reasons, by taking the case analyses methods, I do some research about Business Judgment Rule, and hope that the research result will provide some advice for the development evolution of Chinese corporation law.