Final answer:
The business judgment rule provides protection to corporate directors and officers when making decisions on behalf of the corporation. If the decision-making process was conducted in good faith and in the best interests of the corporation, directors and officers will not be held personally liable for any losses. However, if they fail to meet the standards set by the business judgment rule, they can be held personally liable.
Step-by-step explanation:
The business judgment rule is a legal principle that provides protection to corporate directors and officers when making decisions on behalf of the corporation. It states that as long as the decision-making process was conducted in good faith, with due care, and in the best interests of the corporation, directors and officers will not be held personally liable for any losses or damages incurred by the corporation as a result of their decisions.
In the case of Brian, the Chief Financial Officer of the Hamilton Corporation, the court ruled that he had not acted in good faith. This means that Brian did not meet the standard required by the business judgment rule and can be held personally liable for the losses suffered by the corporation as a result of his decision.