Question

precludes imposing liability on directors and officers for honest mistakes in the judgment if they act with due care, in good faith, and in a manner reasonably believed to be in the best interests of the corporation.

Answer 1

Answer: c. business judgment rule

Step-by-step explanation:

The BUSINESS JUDGEMENT RULE helps protect Boards of Directors from frivolous legal allegations concerning the firm's business.

In common law countries, there is a rule that states that boards are presumed to act within the FIDUCIARY STANDARDS of LOYALTY, PRUDENCE and CARE that is expected of them to protect shareholders.

And if they make mistakes during the course of their loyal, prudent and caring actions, this fact is taken into consideration.