The Statutory Business Judgment Rule: Putting the Wind into Directors’ Sails

Abstract

Company directors should welcome and embrace the statutory business judgment rule, due to commence on 13 March 2000. It finally provides them with the certainty that they need to take their companies into the next millenium. The Corporate Law Economic Reform Program Bill 1998 was passed by Parliament on 20 October 1999. The position is now clear – the merits of bona fide business judgments made by directors, meeting the four requirements, will not be subject to judicial review. Directors will be taken to have met their duty of care and diligence.