The business judgement rule is a principle of liability of the Management Board Members that is derived from the U.S. Law. On the basis of this rule, the company will only be able to hold a Board Member liable if, on the basis of prepared opinions, analyses or information, it can be objectively determined that the Board Member has exceeded the limits of reasonable economic risk by acting in an disloyal manner towards the company.
As a result, the liability of the MB Members will de facto be mitigated.
The company (i.e. the Management Board and partners) should collect documents in the form of analyses, opinions, expertise, etc., which in the future may prove whether given MB Member was guided in his decisions by the company’s interest or not.
Thus, it is recommended for each current Management Board, or even shareholders, to take care of collecting this type of documents in order to assess the business situation of the company.
Author: Oliwia Kruczyńska, Junior Associate at Kołecka Law Firm