Abstract
The business judgment rule originated from the United States of America and was codified in the Companies Act 2008 under section 76(4). This rule relates directly to the duty to act in the best interest of the company and the duty to act with care, skill and diligence. The rule provides protection to directors for their decisions which have an undesirable result, provided the director was compliant with the requirement to take reasonable steps to becoming informed on the matter, had no conflict of interest and rationally believed he acted in the best interest of the company. The recommendation that the business judgment rule should be codified into South African law was criticized by various academic authors who deemed the codification unnecessary. Regardless, the rule has been codified and it is important to evaluate the requirements and operation of the rule...
LL.M. (Corporate Law)