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In which of the following would the business judgment rule not help a manager escape liability?

1) When the manager acted in bad faith
2) When the manager acted with gross negligence
3) When the manager acted in the best interest of the company
4) When the manager acted within the scope of their authority

User SamAlvin
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1 Answer

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Final answer:

The business judgment rule does not protect a manager when they act in bad faith or with gross negligence. It is designed to shield managers making decisions in good faith and presumed to be beneficial to the company.

Step-by-step explanation:

In which of the following would the business judgment rule not help a manager escape liability? The business judgment rule would not protect a manager in the first two instances: 1) When the manager acted in bad faith and 2) When the manager acted with gross negligence. The rule is designed to protect managers from liability when they make business decisions in good faith, with the presumption that they acted with due care and in the best interest of the company. If a manager acts within the scope of their authority and in the company's best interest, they are usually protected by this rule.

User Erik Escobedo
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