Avoiding the courtroom: Application of the business judgment rule

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The Honorable Randy J. Holland, Delaware Supreme Court Justice, spoke about the application of the business judgment rule at PwC's recent Directors' College program.The business judgment rule provides a safe harbor for directors of a corporation. It is a judicial acknowledgment that a director won't be held personally liable for a breach of fiduciary duty as long as a board decision is made on an informed basis; in good faith; in the honest belief that the board's action is in the best interest of the company; and absent a conflict of interest.Citing Justice Holland's speech as the clearest explanation of the business judgment rule they had ever heard, attendees of the Directors' College program requested a copy of the transcript to share with their fellow board members. The attached file provides the speech for reference by directors.